##### Table of Contents



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 March 10, 2007
 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
    
    43-1470322(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)12 East Armour Boulevard, Kansas City, Missouri
    
    64111(Address of principal executive offices)
    
    (Zip Code)
 (816) 502-4000
(Registrants telephone number, including area code)
 o þ
  o þ o
 o þ




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##### 



INTERSTATE BAKERIES CORPORATION
FORM 10-Q
QUARTER ENDED MARCH 10, 2007
 Description
    
    PagePART I  FINANCIAL INFORMATION (UNAUDITED)
    
    
    3ITEM 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
    
    
    32Forward-Looking Statements
    
    
    40ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    43ITEM 4. Controls and Procedures
    
    
    44PART II  OTHER INFORMATION
    
    
    45ITEM 1. Legal Proceedings
    
    
    45ITEM 1A. Risk Factors
    
    
    46ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    47ITEM 6. Exhibits
    
    
    48Signatures
    
    
    49302 Certification of Chief Executive Officer302 Certification of Executive VP and Chief Financial Officer906 Certification of Chief Executive Officer906 Certification of Executive VP and Chief Financial Officer
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##### Table of Contents



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)
 March 10,
    
    
    June 3,2007
    
    
    2006ASSETSCurrent assetsCash
    
    $
    70,907
    
    
    $
    78,178Restricted cash
    
    
    8,829
    
    
    
    86,353Accounts receivable, less allowance for doubtful accounts of $3,215 and $3,400, respectively
    
    
    146,553
    
    
    
    150,507Inventories
    
    
    67,092
    
    
    
    65,431Assets held for sale
    
    
    10,175
    
    
    
    11,931Other current assets
    
    
    56,634
    
    
    
    67,637Total current assets
    
    
    360,190
    
    
    
    460,037Property and equipment, net
    
    
    559,670
    
    
    
    601,101Intangible assets
    
    
    160,441
    
    
    
    161,128Other assets
    
    
    30,399
    
    
    
    30,789Total assets
    
    $
    1,110,700
    
    
    $
    1,253,055LIABILITIES AND STOCKHOLDERS DEFICITLiabilities not subject to compromiseCurrent liabilitiesLong-term debt
    
    $
    451,508
    
    
    $
    494,882Accounts payable
    
    
    128,440
    
    
    
    117,044Accrued expenses
    
    
    232,306
    
    
    
    244,166Total current liabilities
    
    
    812,254
    
    
    
    856,092Other liabilities
    
    
    269,018
    
    
    
    272,647Deferred income taxes
    
    
    75,719
    
    
    
    77,819Total liabilities not subject to compromise
    
    
    1,156,991
    
    
    
    1,206,558Liabilities subject to compromise
    
    
    288,809
    
    
    
    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,
45,251,000 and 45,295,000 shares outstanding, respectively
    
    
    816
    
    
    
    816Additional paid-in capital
    
    
    584,238
    
    
    
    585,631Accumulated deficit
    
    
    (237,562
    )
    
    
    (142,711
    )Treasury stock, 36,328,000 and 36,284,000 shares at cost, respectively
    
    
    (678,714
    )
    
    
    (678,572
    )Unearned restricted stock compensation
    
    
    
    
    
    
    (1,869
    )Accumulated other comprehensive loss
    
    
    (3,878
    )
    
    
    (3,878
    )Total stockholders deficit
    
    
    (335,100
    )
    
    
    (240,583
    )Total liabilities and stockholders deficit
    
    $
    1,110,700
    
    
    $
    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)
 Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 10,
    
    
    March 4,
    
    
    March 10,
    
    
    March 4,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    861,641
    
    
    $
    874,809
    
    
    $
    2,217,799
    
    
    $
    2,321,839Cost of products sold (exclusive of items shown below)
    
    
    440,215
    
    
    
    455,740
    
    
    
    1,139,908
    
    
    
    1,183,175Selling, delivery and administrative expenses
    
    
    417,300
    
    
    
    447,546
    
    
    
    1,058,672
    
    
    
    1,151,793Restructuring credits
    
    
    (246
    )
    
    
    (33,332
    )
    
    
    (3,910
    )
    
    
    (21,677
    )Depreciation and amortization
    
    
    22,015
    
    
    
    23,531
    
    
    
    54,548
    
    
    
    59,082Loss on sale or abandonment of assets
    
    
    2,023
    
    
    
    1,183
    
    
    
    2,757
    
    
    
    1,749881,307
    
    
    
    894,668
    
    
    
    2,251,975
    
    
    
    2,374,122Operating loss
    
    
    (19,666
    )
    
    
    (19,859
    )
    
    
    (34,176
    )
    
    
    (52,283
    )Other (income) expenseInterest expense (excluding unrecorded contractual
interest expense of $1,867, $1,867, $4,617, and
$4,550, respectively)
    
    
    14,673
    
    
    
    16,529
    
    
    
    38,831
    
    
    
    39,020Reorganization charges, net
    
    
    9,980
    
    
    
    10,255
    
    
    
    26,687
    
    
    
    28,402Other income
    
    
    (44
    )
    
    
    (82
    )
    
    
    (1,120
    )
    
    
    (2,917
    )24,609
    
    
    
    26,702
    
    
    
    64,398
    
    
    
    64,505Loss before income taxes
    
    
    (44,275
    )
    
    
    (46,561
    )
    
    
    (98,574
    )
    
    
    (116,788
    )Provision (benefit) for income taxes
    
    
    (2,040
    )
    
    
    (3,927
    )
    
    
    (3,723
    )
    
    
    (13,842
    )Net loss
    
    $
    (42,235
    )
    
    $
    (42,634
    )
    
    $
    (94,851
    )
    
    $
    (102,946
    )Loss per shareBasic
    
    $
    (0.94
    )
    
    $
    (0.94
    )
    
    $
    (2.10
    )
    
    $
    (2.28
    )Diluted
    
    $
    (0.94
    )
    
    $
    (0.94
    )
    
    $
    (2.10
    )
    
    $
    (2.28
    )
  4




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INTERSTATE BAKERIES CORPORATION
(DEBTOR-IN-POSSESSION)
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(dollars in thousands)
 Forty Weeks EndedMarch 10,
    
    
    March 4,2007
    
    
    2006Operating activitiesNet loss
    
    $
    (94,851
    )
    
    $
    (102,946
    )Depreciation and amortization
    
    
    54,548
    
    
    
    59,082Provision (benefit) for deferred income taxes
    
    
    900
    
    
    
    (1,260
    )Reorganization charges, net
    
    
    26,687
    
    
    
    28,402Cash reorganization items
    
    
    (27,399
    )
    
    
    (28,094
    )Non-cash bankruptcy-related credits
    
    
    848
    
    
    
    (294
    )Non-cash interest expense  deferred debt fees
    
    
    2,524
    
    
    
    5,247Non-cash restricted stock and deferred share compensation expense
    
    
    83
    
    
    
    641(Gain) loss on sale, write-down or abandonment of assets
    
    
    (3,349
    )
    
    
    (31,217
    )Change in operating assets and liabilities:Accounts receivable
    
    
    3,954
    
    
    
    22,402Inventories
    
    
    (1,661
    )
    
    
    11,079Other current assets
    
    
    8,003
    
    
    
    (1,198
    )Accounts payable and accrued expenses
    
    
    623
    
    
    
    (15,096
    )Long-term portion of self insurance reserves
    
    
    (219
    )
    
    
    15,049Other
    
    
    (1,485
    )
    
    
    (7,095
    )Net cash from (used in) operating activities
    
    
    (30,794
    )
    
    
    (45,298
    )Investing activitiesPurchases of property and equipment
    
    
    (21,135
    )
    
    
    (25,225
    )Proceeds from sale of assets
    
    
    14,445
    
    
    
    79,839Restricted cash deposit
    
    
    (12,503
    )
    
    
    (74,276
    )Restricted cash release
    
    
    89,222
    
    
    
    Acquisition and development of software assets
    
    
    (1,678
    )
    
    
    Other
    
    
    221
    
    
    
    51Net cash from (used in) investing activities
    
    
    68,572
    
    
    
    (19,611
    )Financing activitiesReduction of long-term debt
    
    
    (46,066
    )
    
    
    (800
    )Increase in revolving credit facility
    
    
    3,051
    
    
    
    13,415Stock option exercise proceeds
    
    
    
    
    
    
    101Acquisition of treasury stock
    
    
    
    
    
    
    (1
    )Debt fees
    
    
    (2,034
    )
    
    
    (750
    )Net cash from (used in) financing activities
    
    
    (45,049
    )
    
    
    11,965Net increase (decrease) in cash
    
    
    (7,271
    )
    
    
    (52,944
    )Cash at the beginning of period
    
    
    78,178
    
    
    
    151,558Cash at the end of period
    
    $
    70,907
    
    
    $
    98,614Cash payments (received)Interest
    
    $
    35,668
    
    
    $
    35,234Income taxes
    
    
    (13,499
    )
    
    
    (15,486
    )Non-cash investing and financing activitiesLong-term debt reduction from lease rejections
    
    
    359
    
    
    
    890Asset disposals from lease rejections
    
    
    271
    
    
    
    705Convertible note conversion to equity
    
    
    1
    
    
    
    Interest income earned on restricted cash deposit
    
    
    688
    
    
    
    405
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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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (94,851
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (94,851
    )Adoption of SFAS No. 123R,
Share-Based Payment
    
    
    
    
    
    
    
    
    
    
    (1,869
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,869
    
    
    
    
    
    
    
    Convertible note
conversion
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    1Restricted share
compensation expense
    
    
    
    
    
    
    
    
    
    
    883
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    883Restricted share surrenders
    
    
    
    
    
    
    
    
    
    
    (406
    )
    
    
    
    
    
    
    (44
    )
    
    
    (144
    )
    
    
    
    
    
    
    
    
    
    
    (550
    )Balance March 10, 2007
    
    
    81,579
    
    
    $
    816
    
    
    $
    584,238
    
    
    $
    (237,562
    )
    
    
    (36,328
    )
    
    $
    (678,714
    )
    
    $
    
    
    
    $
    (3,878
    )
    
    $
    (335,100
    )
  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




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##### Table of Contents



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
 9




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##### Table of Contents



Accounting Changes and Error
Corrections Accounting Changes Reporting Accounting Changes in Interim Financial Statements
 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 The
Fair Value Option for Financial Assets and Liabilities
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans
 Fair Value Measurements
 10




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##### Table of Contents



Quantifying Financial Misstatements
 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
  March 10,
    
    
    June 3,2007
    
    
    2006(dollars in thousands)Ingredients and packaging
    
    $
    44,155
    
    
    $
    44,540Finished goods
    
    
    22,937
    
    
    
    20,891$
    67,092
    
    
    $
    65,431
 11




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##### Table of Contents



4. Property and Equipment
  March 10,
    
    
    June 3,2007
    
    
    2006(dollars in thousands)Land and buildings (lives ranging from 10 to 35 years)
    
    $
    389,895
    
    
    $
    390,573Machinery and equipment (lives ranging from 4 to 15 years)
    
    
    911,261
    
    
    
    931,4081,301,156
    
    
    
    1,321,981Less accumulated depreciation
    
    
    (741,486
    )
    
    
    (720,880
    )$
    559,670
    
    
    $
    601,101
  5. Assets Held for Sale
  6. Lease Obligations
  Guarantors Accounting and Disclosure Requirements for Guarantees Including Indirect
Guarantees of Indebtedness of Others
 12




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##### Table of Contents



7. Intangible Assets
   March 10,
    
    
    June 3,2007
    
    
    2006(dollars in thousands)Intangible assets with indefinite lives(generally trademarks and trade names)
    
    $
    157,471
    
    
    $
    157,471Intangible assets with finite livesGross carrying amount
    
    $
    13,854
    
    
    $
    13,854Less: Accumulated amortization
    
    
    (10,884
    )
    
    
    (10,197
    )Net carrying amount
    
    $
    2,970
    
    
    $
    3,657
  8. Debt
  March 10,
    
    
    June 3,2007
    
    
    2006(dollars in thousands)SecuredPost-petition credit agreement
    
    $
    
    
    
    $
    Senior secured credit facility  pre-petition
    
    
    447,510
    
    
    
    489,817Unsecured6% senior subordinated convertible notes  pre-petition
    
    
    99,999
    
    
    
    100,000Capital lease converted to pre-petition debt
    
    
    6,125
    
    
    
    6,125Capital leasesReal Estate
    
    
    3,998
    
    
    
    5,065557,632
    
    
    
    601,007Less:Long-term debt recorded to current liabilities
    
    
    (451,508
    )
    
    
    (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




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Senior Secured Credit Facility
  14




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##### Table of Contents



6% Senior Subordinated Convertible Notes
  Other Matters
   9. Derivative Instruments
      15




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##### Table of Contents



10. Liabilities Subject to Compromise
     March 10,
    
    
    June 3,2007
    
    
    2006(dollars in thousands)Accounts payable
    
    $
    129,960
    
    
    $
    129,951Taxes payable
    
    
    6,923
    
    
    
    7,966Retirement obligations (SERP and deferred compensation)
    
    
    14,339
    
    
    
    14,598Legal reserve
    
    
    13,263
    
    
    
    12,910Interest bearing debt and capital leases
    
    
    106,124
    
    
    
    106,125Other
    
    
    18,200
    
    
    
    15,530$
    288,809
    
    
    $
    287,080
  16




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11. Employee Benefit Plans
 American Bakers Association Retirement Plan
       17




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##### Table of Contents



Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 10,
    
    
    March 4,
    
    
    March 10,
    
    
    March 4,2007
    
    
    2006
    
    
    2007
    
    
    2006(dollars in thousands)Service cost
    
    $
    348
    
    
    $
    486
    
    
    $
    870
    
    
    $
    1,214Interest cost
    
    
    1,035
    
    
    
    987
    
    
    
    2,587
    
    
    
    2,467Expected return on negative plan assets
    
    
    112
    
    
    
    76
    
    
    
    280
    
    
    
    190Recognition of
actuarial gain
    
    
    
    
    
    
    (1,709
    )
    
    
    
    
    
    
    (4,271
    )Total periodic pension (credit) cost
    
    
    1,495
    
    
    
    (160
    )
    
    
    3,737
    
    
    
    (400
    )Curtailment gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,176
    )Net pension (credit) expense
    
    $
    1,495
    
    
    $
    (160
    )
    
    $
    3,737
    
    
    $
    (1,576
    )
 Defined Benefit Pension Plan
  Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 10,
    
    
    March 4,
    
    
    March 10,
    
    
    March 4,2007
    
    
    2006
    
    
    2007
    
    
    2006(dollars in thousands)Service cost
    
    $
    284
    
    
    $
    278
    
    
    $
    710
    
    
    $
    696Interest cost
    
    
    1,221
    
    
    
    1,242
    
    
    
    3,053
    
    
    
    3,106Expected return on plan assets
    
    
    (1,662
    )
    
    
    (1,503
    )
    
    
    (4,154
    )
    
    
    (3,757
    )Recognition ofPrior service cost
    
    
    85
    
    
    
    88
    
    
    
    211
    
    
    
    220Actuarial loss
    
    
    10
    
    
    
    167
    
    
    
    24
    
    
    
    415Net pension (credit) expense
    
    $
    (62
    )
    
    $
    272
    
    
    $
    (156
    )
    
    $
    680
 Postretirement Health and Life Plans
    18




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##### Table of Contents



Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 10,
    
    
    March 4,
    
    
    March 10,
    
    
    March 4,2007
    
    
    2006
    
    
    2007
    
    
    2006(dollars in thousands)Service cost
    
    $
    226
    
    
    $
    445
    
    
    $
    822
    
    
    $
    1,111Interest cost
    
    
    929
    
    
    
    1,043
    
    
    
    2,595
    
    
    
    2,609AmortizationUnrecognized prior service benefit
    
    
    (2,274
    )
    
    
    (2,274
    )
    
    
    (5,686
    )
    
    
    (5,686
    )Unrecognized net loss
    
    
    278
    
    
    
    402
    
    
    
    762
    
    
    
    1,006Net postretirement benefit (credit) expense
    
    $
    (841
    )
    
    $
    (384
    )
    
    $
    (1,507
    )
    
    $
    (960
    )
  12. Supplemental Executive Retirement Plan
    13. Stock-Based Compensation
   1996 Stock Incentive Plan
  19




---



##### Table of Contents



WeightedWeighted
    
    
    AverageAverage
    
    
    RemainingExercise Price
    
    
    Contractual
    
    
    AggregateShares
    
    
    Per Share
    
    
    Term
    
    
    Intrinsic Value(dollars in(in thousands)
    
    
    
    
    
    
    
    
    
    
    thousands)Outstanding, beginning of period
    
    
    4,099
    
    
    $
    16.41Expired
    
    
    (580
    )
    
    
    18.17Outstanding, end of period
    
    
    3,519
    
    
    
    16.12
    
    
    
    4.31
    
    
    $
    25,347Options exercisable, end of period
    
    
    3,519
    
    
    
    16.12
    
    
    
    4.31
    
    
    $
    25,347
    WeightedAverageGrant DateShares
    
    
    Fair Value(in thousands)Nonvested, beginning of period
    
    
    162
    
    
    $
    14.49Vested
    
    
    (42
    )
    
    
    14.80Surrendered
    
    
    (44
    )
    
    
    14.23Nonvested, end of period
    
    
    76
    
    
    
    14.47
    20




---



##### Table of Contents



Pro Forma Employee Stock-Based Compensation Expense
 Accounting for
Stock-Based Compensation  Transition and Disclosure
  SixteenWeeks
    
    
    FortyEnded
    
    
    Weeks EndedMarch 4, 2006(dollars in thousands, except per share data)Net loss, as reported
    
    $
    (42,634
    )
    
    $
    (102,946
    )Add: Stock-based employee
compensation expense included in
reported net income, net of related
tax effects
    
    
    11
    
    
    
    641Deduct: Total stock-based employee
compensation expense determined
under fair value based method for
all awards, net of related tax
effects
    
    
    (138
    )
    
    
    (989
    )Pro forma net loss
    
    $
    (42,761
    )
    
    $
    (103,294
    )Basic and diluted loss per shareAs reported
    
    $
    (0.94
    )
    
    $
    (2.28
    )Pro forma
    
    
    (0.95
    )
    
    
    (2.29
    )
 14. Restructuring (Credits) Charges
  Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 10,
    
    
    March 4,
    
    
    March 10,
    
    
    March 4,2007
    
    
    2006
    
    
    2007
    
    
    2006(dollars in thousands)Severance (credits) charges
    
    $
    (680
    )
    
    $
    1,252
    
    
    $
    (384
    )
    
    $
    5,756Long-lived asset (credits) charges
    
    
    4
    
    
    
    (36,381
    )
    
    
    (5,191
    )
    
    
    (32,094
    )Curtailment gain on a benefit plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (706
    )Other exit costs
    
    
    430
    
    
    
    1,797
    
    
    
    1,665
    
    
    
    5,367Total
    
    $
    (246
    )
    
    $
    (33,332
    )
    
    $
    (3,910
    )
    
    $
    (21,677
    )
 Fiscal 2007 Activity
    21




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##### Table of Contents



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 March 10, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Fiscal 2005 Consolidation
& RIF PlanBalance June 3, 2006
    
    
    199
    
    
    
    
    
    
    
    
    
    
    
    199Expensed in Fiscal 2007
    
    
    6
    
    
    
    84
    
    
    
    201
    
    
    
    291Cash Paid in Fiscal 2007
    
    
    (197
    )
    
    
    
    
    
    
    (201
    )
    
    
    (398
    )Noncash Utilization in
Fiscal 2007
    
    
    
    
    
    
    (84
    )
    
    
    
    
    
    
    (84
    )Balance March 10, 2007
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    8Fiscal 2005 PC Review PlanBalance June 3, 2006
    
    
    893
    
    
    
    
    
    
    
    98
    
    
    
    991Expensed in Fiscal 2007
    
    
    (317
    )
    
    
    (309
    )
    
    
    836
    
    
    
    210Cash Paid in Fiscal 2007
    
    
    (541
    )
    
    
    
    
    
    
    (934
    )
    
    
    (1,475
    )Noncash Utilization in
Fiscal 2007
    
    
    
    
    
    
    309
    
    
    
    
    
    
    
    309Balance March 10, 2007
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    35Fiscal 2006 PC Review PlanBalance June 3, 2006
    
    
    1,000
    
    
    
    
    
    
    
    45
    
    
    
    1,045Expensed in Fiscal 2007
    
    
    (264
    )
    
    
    (4,958
    )
    
    
    569
    
    
    
    (4,653
    )Cash Paid in Fiscal 2007
    
    
    (643
    )
    
    
    
    
    
    
    (614
    )
    
    
    (1,257
    )Noncash Utilization in
Fiscal 2007
    
    
    
    
    
    
    4,958
    
    
    
    
    
    
    
    4,958Balance March 10, 2007
    
    
    93
    
    
    
    
    
    
    
    
    
    
    
    93Accounting Office ClosingsBalance June 3, 2006
    
    
    345
    
    
    
    
    
    
    
    
    
    
    
    345Expensed in Fiscal 2007
    
    
    191
    
    
    
    
    
    
    
    55
    
    
    
    246Cash Paid in Fiscal 2007
    
    
    (417
    )
    
    
    
    
    
    
    (37
    )
    
    
    (454
    )Noncash Utilization in
Fiscal 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance March 10, 2007
    
    
    119
    
    
    
    
    
    
    
    18
    
    
    
    137ConsolidatedBalance June 3, 2006
    
    
    2,437
    
    
    
    
    
    
    
    143
    
    
    
    2,580Expensed in Fiscal 2007
    
    
    (384
    )
    
    
    (5,191
    )
    
    
    1,665
    
    
    
    (3,910
    )Cash Paid in Fiscal 2007
    
    
    (1,798
    )
    
    
    
    
    
    
    (1,790
    )
    
    
    (3,588
    )Noncash Utilization in
Fiscal 2007
    
    
    
    
    
    
    5,191
    
    
    
    
    
    
    
    5,191Balance March 10, 2007
    
    $
    255
    
    
    $
    
    
    
    $
    18
    
    
    $
    273
 22




---



##### Table of Contents



Fiscal 2006 Activity
       Long-LivedSeverance
    
    
    Assetand Related
    
    
    ChargesBenefits
    
    
    (Credits)
    
    
    Other
    
    
    TotalFiscal 2004 Plan
    
    $
    2,537
    
    
    $
    (8,091
    )
    
    $
    7,006
    
    
    $
    1,452Fiscal 2005 Consolidation
& RIF Plan
    
    
    5,581
    
    
    
    6,473
    
    
    
    2,784
    
    
    
    14,838Fiscal 2005 PC Review Plan
    
    
    6,889
    
    
    
    18,348
    
    
    
    (4,192
    )
    
    
    21,045Fiscal 2006 PC Review Plan
    
    
    5,899
    
    
    
    (19,358
    )
    
    
    3,594
    
    
    
    (9,865
    )Accounting Office Closings
    
    
    536
    
    
    
    
    
    
    
    55
    
    
    
    591
 23




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##### Table of Contents



Severanceand RelatedBenefits
    
    
    Other
    
    
    TotalFiscal 2005 PC Review Plan
    
    $
    
    
    
    $
    644
    
    
    $
    644Fiscal 2006 PC Review Plan
    
    
    
    
    
    
    224
    
    
    
    224Accounting Office Closings
    
    
    103
    
    
    
    
    
    
    
    103
 15. Reorganization Charges
  March 10, 2007Sixteen Weeks
    
    
    Forty WeeksEnded
    
    
    EndedReorganization
    
    
    Reorganization
    
    
    CashCharges
    
    
    Charges
    
    
    Payments(dollars in thousands)Professional fees
    
    $
    10,548
    
    
    $
    29,003
    
    
    $
    29,623Employee retention expenses
    
    
    316
    
    
    
    1,016
    
    
    
    1,968Lease rejection charges (credits)
    
    
    (44
    )
    
    
    54
    
    
    
    Interest income
    
    
    (839
    )
    
    
    (2,560
    )
    
    
    (3,366
    )Gain on sale of assets
    
    
    (1
    )
    
    
    (826
    )
    
    
    (826
    )Reorganization charges, net
    
    $
    9,980
    
    
    $
    26,687
    
    
    $
    27,399
 March 4, 2006Sixteen Weeks
    
    
    Forty WeeksEnded
    
    
    EndedReorganization
    
    
    Reorganization
    
    
    CashCharges
    
    
    Charges
    
    
    Payments(dollars in thousands)Professional fees
    
    $
    10,136
    
    
    $
    25,901
    
    
    $
    27,165Employee retention expenses
    
    
    1,347
    
    
    
    5,753
    
    
    
    4,323Lease rejection charges (credits)
    
    
    618
    
    
    
    547
    
    
    
    Interest income
    
    
    (1,846
    )
    
    
    (3,202
    )
    
    
    (2,797
    )Gain on sale of assets
    
    
    
    
    
    
    (597
    )
    
    
    (597
    )Reorganization charges, net
    
    $
    10,255
    
    
    $
    28,402
    
    
    $
    28,094
 24




---



##### Table of Contents



16. Income Taxes
  Forty Weeks EndedMarch 10,
    
    
    March 4,2007
    
    
    2006Statutory federal tax rate
    
    
    35.0
    %
    
    
    35.0
    %State income tax, net
    
    
    1.1
    
    
    
    1.1Valuation allowance increase
    
    
    (30.9
    )
    
    
    (26.6
    )Adjustments to prior year tax accruals
    
    
    0.3
    
    
    
    3.5Other
    
    
    (1.7
    )
    
    
    (1.1
    )3.8
    %
    
    
    11.9
    %
    17. Commitments and Contingencies
   25




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26




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##### Table of Contents



27




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##### Table of Contents



28




---



##### Table of Contents



18. Earnings (Loss) per Share
 Earnings per
Share
  Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 10,
    
    
    March 4,
    
    
    March 10,
    
    
    March 4,2007
    
    
    2006
    
    
    2007
    
    
    2006(in thousands)Weighted average common shares outstanding:Basic and diluted
    
    
    45,169
    
    
    
    45,129
    
    
    
    45,167
    
    
    
    45,111
 29




---



##### Table of Contents



19. Comprehensive Loss
  Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 10,
    
    
    March 4,
    
    
    March 10,
    
    
    March 4,2007
    
    
    2006
    
    
    2007
    
    
    2006(dollars in thousands)Net loss
    
    $
    (42,235
    )
    
    $
    (42,634
    )
    
    $
    (94,851
    )
    
    $
    (102,946
    )Other comprehensive income (loss):Commodity derivative (gains) losses
reclassified to cost of products
sold, net of income taxes of $0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (477
    )Comprehensive loss
    
    $
    (42,235
    )
    
    $
    (42,634
    )
    
    $
    (94,851
    )
    
    $
    (103,423
    )
 20. Segment Information
 Disclosures about Segments of an Enterprise and Related Information
  Wholesale operations
 Retail operations
  30




---



##### Table of Contents



Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 10,
    
    
    March 4,
    
    
    March 10,
    
    
    March 4,2007
    
    
    2006
    
    
    2007
    
    
    2006(dollars in thousands)Net SalesWholesale operations
    
    $
    768,577
    
    
    $
    774,564
    
    
    $
    1,969,859
    
    
    $
    2,049,747Retail operations
    
    
    93,064
    
    
    
    100,245
    
    
    
    247,940
    
    
    
    272,092Total net sales
    
    $
    861,641
    
    
    $
    874,809
    
    
    $
    2,217,799
    
    
    $
    2,321,839Operating Income (Loss)Wholesale operations
    
    $
    4,393
    
    
    $
    (28,589
    )
    
    $
    19,183
    
    
    $
    (19,048
    )Retail operations
    
    
    1,556
    
    
    
    (199
    )
    
    
    6,555
    
    
    
    6,8835,949
    
    
    
    (28,788
    )
    
    
    25,738
    
    
    
    (12,165
    )Corporate
    
    
    (25,615
    )
    
    
    8,929
    
    
    
    (59,914
    )
    
    
    (40,118
    )Total operating loss
    
    
    (19,666
    )
    
    
    (19,859
    )
    
    
    (34,176
    )
    
    
    (52,283
    )Interest expense
    
    
    14,673
    
    
    
    16,529
    
    
    
    38,831
    
    
    
    39,020Reorganization charges
    
    
    9,980
    
    
    
    10,255
    
    
    
    26,687
    
    
    
    28,402Other (income) expense
    
    
    (44
    )
    
    
    (82
    )
    
    
    (1,120
    )
    
    
    (2,917
    )24,609
    
    
    
    26,702
    
    
    
    64,398
    
    
    
    64,505Loss before income taxes
    
    
    (44,275
    )
    
    
    (46,561
    )
    
    
    (98,574
    )
    
    
    (116,788
    )Provision (benefit) for income taxes
    
    
    (2,040
    )
    
    
    (3,927
    )
    
    
    (3,723
    )
    
    
    (13,842
    )Net loss
    
    $
    (42,235
    )
    
    $
    (42,634
    )
    
    $
    (94,851
    )
    
    $
    (102,946
    )
 21. Subsequent Events
  31




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##### Table of Contents



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
 COMPANY OVERVIEW
  RECENT DEVELOPMENTS
        CRITICAL ACCOUNTING POLICIES
 Critical Accounting Policies
 32




---



##### Table of Contents



RESULTS OF OPERATIONS
  Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 10,
    
    
    March 4,
    
    
    March 10,
    
    
    March 4,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of products sold (exclusive of items
shown below)
    
    
    51.1
    
    
    
    52.1
    
    
    
    51.4
    
    
    
    51.0Selling, delivery and administrative expenses
    
    
    48.4
    
    
    
    51.2
    
    
    
    47.7
    
    
    
    49.6Restructuring credits
    
    
    
    
    
    
    (3.8
    )
    
    
    (0.2
    )
    
    
    (0.9
    )Depreciation and amortization
    
    
    2.6
    
    
    
    2.7
    
    
    
    2.5
    
    
    
    2.5Loss on sale or abandonment of assets
    
    
    0.2
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1Operating loss
    
    
    (2.3
    )
    
    
    (2.3
    )
    
    
    (1.5
    )
    
    
    (2.3
    )Interest expense
    
    
    1.7
    
    
    
    1.9
    
    
    
    1.8
    
    
    
    1.7Reorganization charges, net
    
    
    1.1
    
    
    
    1.1
    
    
    
    1.2
    
    
    
    1.1Other income
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    (0.1
    )Loss before income taxes
    
    
    (5.1
    )
    
    
    (5.3
    )
    
    
    (4.4
    )
    
    
    (5.0
    )Provision (benefit) for income taxes
    
    
    (0.2
    )
    
    
    (0.4
    )
    
    
    (0.1
    )
    
    
    (0.6
    )Net loss
    
    
    (4.9
    )%
    
    
    (4.9
    )%
    
    
    (4.3
    )%
    
    
    (4.4
    )%
 Net Sales
 (dollars in thousands)
 Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 10,
    
    
    
    
    
    
    March 4,
    
    
    
    
    
    
    %
    
    
    March 10,
    
    
    
    
    
    
    March 4,
    
    
    
    
    
    
    %2007
    
    
    %
    
    
    2006
    
    
    %
    
    
    Change
    
    
    2007
    
    
    %
    
    
    2006
    
    
    %
    
    
    ChangeWholesale operations
    
    $
    768,577
    
    
    
    89.2
    %
    
    $
    774,564
    
    
    
    88.5
    %
    
    
    (0.8
    )%
    
    $
    1,969,859
    
    
    
    88.8
    %
    
    $
    2,049,747
    
    
    
    88.3
    %
    
    
    (3.9
    )%Retail operations
    
    
    93,064
    
    
    
    10.8
    
    
    
    100,245
    
    
    
    11.5
    
    
    
    (7.2
    )
    
    
    247,940
    
    
    
    11.2
    
    
    
    272,092
    
    
    
    11.7
    
    
    
    (8.9
    )Total net sales
    
    $
    861,641
    
    
    
    100.0
    %
    
    $
    874,809
    
    
    
    100.0
    %
    
    
    (1.5
    )%
    
    $
    2,217,799
    
    
    
    100.0
    %
    
    $
    2,321,839
    
    
    
    100.0
    %
    
    
    (4.5
    )%
 Consolidated net sales.
 Wholesale operations net sales.
 33




---



##### Table of Contents



Retail operations net sales.
 Gross profit (exclusive of depreciation and amortization).
   Selling, delivery and administrative expenses.
  34




---



##### Table of Contents



Restructuring credits.
   Operating Loss
 (dollars in thousands)
 Sixteen Weeks Ended
    
    Forty Weeks EndedMarch 10,
    
    
    
    
    
    March 4,
    
    
    
    
    
    March 10,
    
    
    
    
    
    March 4,2007
    
    %
    
    2006
    
    %
    
    2007
    
    %
    
    2006
    
    %Wholesale operations
    
    $
    4,393
    
    
    
    (22.3
    )%
    
    $
    (28,589
    )
    
    
    144.0
    %
    
    $
    19,183
    
    
    
    (56.1
    )%
    
    $
    (19,048
    )
    
    
    36.4
    %Retail operations
    
    
    1,556
    
    
    
    (7.9
    )
    
    
    (199
    )
    
    
    1.0
    
    
    
    6,555
    
    
    
    (19.2
    )
    
    
    6,883
    
    
    
    (13.1
    )5,949
    
    
    
    (30.2
    )
    
    
    (28,788
    )
    
    
    145.0
    
    
    
    25,738
    
    
    
    (75.3
    )
    
    
    (12,165
    )
    
    
    23.3Corporate
    
    
    (25,615
    )
    
    
    130.2
    
    
    
    8,929
    
    
    
    (45.0
    )
    
    
    (59,914
    )
    
    
    175.3
    
    
    
    (40,118
    )
    
    
    76.7Total operating loss
    
    $
    (19,666
    )
    
    
    100.0
    %
    
    $
    (19,859
    )
    
    
    100.0
    %
    
    $
    (34,176
    )
    
    
    100.0
    %
    
    $
    (52,283
    )
    
    
    100.0
    %
 Consolidated operating loss
 Wholesale operating income (loss).
 35




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Retail operating income (loss).
  Reorganization charges.
    Interest expense.
  Provision for income taxes.
 36




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##### Table of Contents



CASH RESOURCES AND LIQUIDITY
 CASH FLOWS
  Cash from (used in) operating activities.
 Cash from (used in) investing activities.
 Cash from (used in) financing activities.
 SOURCES OF LIQUIDITY AND CAPITAL
  37




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Voluntary Chapter 11 Bankruptcy Filing.
    38




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39




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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 negotiate an extension (if necessary) or refinance our DIP Facility, which
expires on February 9, 2008;
    
    our ability to develop, propose, confirm and consummate one or more plans of
reorganization with respect to the Chapter 11 proceeding;
    
    our ability to achieve the following four priorities established by Mr. Jung: (1) fix our cost structure to grow margins; (2) accelerate innovation to realize attractive revenue growth; (3) drive productivity to improve margins; and (4) create a performance culture;
    
    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;
    
    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
 40




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##### Table of Contents



savings in connection with our profit center restructuring and bakery and
route consolidations;
    
    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;
    
    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.
  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
 41




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##### Table of Contents



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;
    
    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;
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##### Table of Contents




    
    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.
   
 Item 3. Quantitative and Qualitative Disclosure about Market Risk
  Commodity prices.
 43




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Item 4. Controls and Procedures
      44




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
      45




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Item 1A. Risk Factors
  We face uncertainty regarding the adequacy of our capital resources, including liquidity, and
have limited access to additional financing.
      46




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Future cash contribution obligations to the American Bakers Association Retirement Plan, or
the ABA Plan, are expected to significantly exceed previous contributions to the ABA Plan.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Issuer Purchases of Equity Securities (A)
 Total Number of
    
    
    Maximum Number (orShares (or Units)
    
    
    Approximate DollarPurchased as Part
    
    
    Value) of Shares (orTotal Number of
    
    
    Average Price
    
    
    of Publicly
    
    
    Units) that May Yet BeShares (or Units)
    
    
    Paid per Share
    
    
    Announced Plans
    
    
    Purchased Under thePeriod
    
    Purchased(B)
    
    
    (or Unit)
    
    
    or Programs
    
    
    Plans or ProgramsPeriod 7
November 19-December 16, 2006
    
    
    5
    
    
    $
    2.79
    
    
    
    5
    
    
    
    7,396,649Period 8
December 17, 2006-January 13, 2007
    
    
    1
    
    
    $
    2.86
    
    
    
    1
    
    
    
    7,396,648Period 9 
January 14-February 10, 2007
    
    
    2
    
    
    $
    5.78
    
    
    
    2
    
    
    
    7,396,646Period 10
February 11-March 10, 2007
    
    
    8
    
    
    $
    3.31
    
    
    
    8
    
    
    
    7,396,638Total
    
    
    16
    
    
    $
    3.48
    
    
    
    16
    
    
    
    7,396,638
 
 (A)
    
    Since May 11, 1999, our Board of Directors has authorized the purchase of approximately 11.0 million shares of our common stock. Prior to the Chapter 11 filing, management had the discretion
to determine the number of the shares to be purchased, as well as the timing of any such purchases, with the pricing of any shares repurchased to be at prevailing market prices. As of March 10, 2007, 7,396,638 shares of our common
stock were available to be purchased under this stock repurchase program. As a result of our Chapter 11 filing and restrictions imposed by the DIP Facility, however, the program has effectively been suspended since the filing.(B)
    
    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. 47




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Item 6. Exhibits
 ExhibitNo.
    
    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).3.1.1
    
    Certificate of Amendment to the Restated Certificate of Incorporation of Interstate
Bakeries Corporation (incorporated by reference to Exhibit 3.1 to Interstate Bakeries Corporations
Form 8-K filed on March 21, 2007).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).3.2.1
    
    Amendment Number One to the Restated Bylaws of Interstate Bakeries Corporation (incorporated
by reference to Exhibit 3.2 to Interstate Bakeries Corporations Form 8-K filed on March 21, 2007).10.1
    
    Employment Agreement by and among Interstate Bakeries Corporation, Interstate Brands
Corporation and
Craig D. Jung, dated January 30, 2007 (incorporated by reference to Exhibit 10.1 to Interstate
Bakeries Corporations Form 8-K filed on January 31, 2007).10.2
    
    Ninth Amendment, dated as of February 16, 2007, to the Revolving Credit Agreement, dated as of
September 23, 2004, as amended, among Interstate Bakeries Corporation, a Delaware corporation
(Parent Borrower), a debtor and debtor-in-possession in a case pending under Chapter 11 of the
Bankruptcy Code, each of the direct and indirect subsidiaries of the Parent Borrower, each of which
is a debtor and debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code,
JPMorgan Chase Bank, N.A., a national banking association (formerly known as JPMorgan Chase Bank)
(JPMCB), and certain of the other commercial banks, finance companies, insurance companies or
other financial institutions or funds from time to time party to the Revolving Credit Agreement
(together with JPMCB, the Lenders), JPMorgan Chase Bank, N.A., a national banking association
(formerly known as JPMorgan Chase Bank), as administrative agent for the Lenders, and JPMorgan
Chase Bank, N.A., a national banking association (formerly known as JPMorgan Chase Bank), as
collateral agent for the Lenders (incorporated by reference to Exhibit 10.1 to Interstate Bakeries
Corporations Form 8-K filed on February 16, 2007).31.1
    
    Certification of Craig D. Jung 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 Craig D. Jung 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 48




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SIGNATURES
  INTERSTATE BAKERIES CORPORATIONDated: April 18, 2007
    By:
    /s/ Craig D. JungCraig D. JungChief Executive Officer
(Principal Executive Officer)Dated: April 18, 2007
    By:
    /s/ Ronald B. HutchisonRonald B. HutchisonExecutive Vice President and Chief Financial Officer
(Principal Financial Officer) 49