##### 



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 8, 2008
 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)
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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##### 



INTERSTATE BAKERIES CORPORATION
FORM 10-Q
QUARTER ENDED MARCH 8, 2008
 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
    
    
    34Forward-Looking Statements
    
    
    44ITEM 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    48ITEM 4.
    
    Controls and Procedures
    
    
    48PART II  OTHER INFORMATION
    
    
    50ITEM 1A.
    
    Risk Factors
    
    
    50ITEM 6.
    
    Exhibits
    
    
    51Signatures
    
    
    59
  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)
 March 8,
    
    
    June 2,2008
    
    
    2007ASSETSCurrent assetsCash
    
    $
    22,952
    
    
    $
    67,212Restricted cash
    
    
    21,968
    
    
    
    15,085Accounts receivable, less allowance for doubtful accounts of $2,309 and $2,315, respectively
    
    
    135,138
    
    
    
    152,175Inventories
    
    
    57,556
    
    
    
    65,682Assets held for sale
    
    
    19,638
    
    
    
    2,032Other current assets
    
    
    46,696
    
    
    
    49,649Total current assets
    
    
    303,948
    
    
    
    351,835Property and equipment, net
    
    
    474,883
    
    
    
    541,725Intangible assets
    
    
    158,652
    
    
    
    160,239Other assets
    
    
    24,207
    
    
    
    27,593Total assets
    
    $
    961,690
    
    
    $
    1,081,392LIABILITIES AND STOCKHOLDERS DEFICITLiabilities not subject to compromiseCurrent liabilitiesLong-term and post-petition debt
    
    $
    462,197
    
    
    $
    451,515Accounts payable
    
    
    129,780
    
    
    
    129,137Accrued expenses
    
    
    209,092
    
    
    
    217,373Total current liabilities
    
    
    801,069
    
    
    
    798,025Other liabilities
    
    
    240,439
    
    
    
    236,766Deferred income taxes
    
    
    71,724
    
    
    
    74,789Total liabilities not subject to compromise
    
    
    1,113,232
    
    
    
    1,109,580Liabilities subject to compromise
    
    
    298,754
    
    
    
    290,553Stockholders 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,
45,203,000 and 45,249,000 shares outstanding, respectively
    
    
    816
    
    
    
    816Additional paid-in capital
    
    
    584,490
    
    
    
    584,503Accumulated deficit
    
    
    (382,189
    )
    
    
    (255,559
    )Treasury stock, 36,376,000 and 36,330,000 shares at cost, respectively
    
    
    (678,739
    )
    
    
    (678,721
    )Accumulated other comprehensive income
    
    
    25,326
    
    
    
    30,220Total stockholders deficit
    
    
    (450,296
    )
    
    
    (318,741
    )Total liabilities and stockholders deficit
    
    $
    961,690
    
    
    $
    1,081,392
  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 8,
    
    
    March 10,
    
    
    March 8,
    
    
    March 10,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    806,282
    
    
    $
    861,641
    
    
    $
    2,141,214
    
    
    $
    2,217,799Cost of products sold (exclusive of items shown below)
    
    
    417,232
    
    
    
    440,215
    
    
    
    1,088,963
    
    
    
    1,139,908Selling, delivery and administrative expenses
    
    
    400,852
    
    
    
    417,300
    
    
    
    1,032,096
    
    
    
    1,058,672Restructuring (credits) charges
    
    
    226
    
    
    
    (246
    )
    
    
    8,107
    
    
    
    (3,910
    )Depreciation and amortization
    
    
    20,711
    
    
    
    22,015
    
    
    
    51,564
    
    
    
    54,548Loss on sale or abandonment of assets
    
    
    3,247
    
    
    
    2,023
    
    
    
    3,638
    
    
    
    2,757Property and equipment impairment
    
    
    423
    
    
    
    
    
    
    
    10,265
    
    
    
    842,691
    
    
    
    881,307
    
    
    
    2,194,633
    
    
    
    2,251,975Operating loss
    
    
    (36,409
    )
    
    
    (19,666
    )
    
    
    (53,419
    )
    
    
    (34,176
    )Other (income) expenseInterest expense (excluding unrecorded contractual
interest expense of $1,850, $1,867, $4,600, and
$4,617, respectively)
    
    
    13,735
    
    
    
    14,673
    
    
    
    36,018
    
    
    
    38,831Reorganization charges, net
    
    
    17,904
    
    
    
    9,980
    
    
    
    36,809
    
    
    
    26,687Other (income) expense
    
    
    (45
    )
    
    
    (44
    )
    
    
    29
    
    
    
    (1,120
    )31,594
    
    
    
    24,609
    
    
    
    72,856
    
    
    
    64,398Loss before income taxes
    
    
    (68,003
    )
    
    
    (44,275
    )
    
    
    (126,275
    )
    
    
    (98,574
    )Provision (benefit) for income taxes
    
    
    (176
    )
    
    
    (2,040
    )
    
    
    (3,294
    )
    
    
    (3,723
    )Net loss
    
    $
    (67,827
    )
    
    $
    (42,235
    )
    
    $
    (122,981
    )
    
    $
    (94,851
    )Loss per shareBasic
    
    $
    (1.50
    )
    
    $
    (0.94
    )
    
    $
    (2.72
    )
    
    $
    (2.10
    )Diluted
    
    $
    (1.50
    )
    
    $
    (0.94
    )
    
    $
    (2.72
    )
    
    $
    (2.10
    )
  4




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##### 



INTERSTATE BAKERIES CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)  (dollars in thousands)
 Forty Weeks EndedMarch 8,
    
    
    March 10,2008
    
    
    2007Operating activitiesNet loss
    
    $
    (122,981
    )
    
    $
    (94,851
    )Depreciation and amortization
    
    
    51,564
    
    
    
    54,548Provision (benefit) for deferred income taxes
    
    
    (1,225
    )
    
    
    900Reorganization charges, net
    
    
    36,809
    
    
    
    26,687Cash reorganization items
    
    
    (25,020
    )
    
    
    (27,399
    )Non-cash bankruptcy-related charges
    
    
    1,941
    
    
    
    848Non-cash interest expense  deferred debt fees
    
    
    1,817
    
    
    
    2,524Non-cash restricted stock compensation (benefit) expense
    
    
    (31
    )
    
    
    83(Gain) loss on sale, write-down or abandonment of assets
    
    
    11,547
    
    
    
    (3,349
    )Change in operating assets and liabilities:Accounts receivable
    
    
    17,333
    
    
    
    3,954Inventories
    
    
    8,126
    
    
    
    (1,661
    )Other current assets
    
    
    1,213
    
    
    
    8,003Accounts payable and accrued expenses
    
    
    (14,047
    )
    
    
    623Long-term portion of self insurance reserves
    
    
    1,565
    
    
    
    (219
    )Other
    
    
    (263
    )
    
    
    (1,485
    )Net cash used in operating activities
    
    
    (31,652
    )
    
    
    (30,794
    )Investing activitiesPurchases of property and equipment
    
    
    (16,238
    )
    
    
    (21,135
    )Proceeds from sale of assets
    
    
    6,602
    
    
    
    14,445Restricted cash deposit
    
    
    (6,528
    )
    
    
    (12,503
    )Restricted cash release
    
    
    
    
    
    
    89,222Acquisition and development of software assets
    
    
    (743
    )
    
    
    (1,678
    )Other
    
    
    51
    
    
    
    221Net cash from (used in) investing activities
    
    
    (16,856
    )
    
    
    68,572Financing activitiesReduction of long-term debt
    
    
    (692
    )
    
    
    (46,066
    )Increase in pre-petition credit facility
    
    
    2,490
    
    
    
    3,051Increase in post-petition credit facility
    
    
    9,000
    
    
    
    Debt fees
    
    
    (6,550
    )
    
    
    (2,034
    )Net cash from (used in) financing activities
    
    
    4,248
    
    
    
    (45,049
    )Net decrease in cash
    
    
    (44,260
    )
    
    
    (7,271
    )Cash at the beginning of period
    
    
    67,212
    
    
    
    78,178Cash at the end of period
    
    $
    22,952
    
    
    $
    70,907Cash payments (received)Interest
    
    $
    33,728
    
    
    $
    35,668Income taxes
    
    
    (5,909
    )
    
    
    (13,499
    )Non-cash investing and financing activitiesLong-term debt reduction from lease rejections
    
    
    116
    
    
    
    359Asset disposals from lease rejections
    
    
    93
    
    
    
    271Convertible note conversion to equity
    
    
    
    
    
    
    1Interest income earned on restricted cash deposit
    
    
    355
    
    
    
    688
  5




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##### 



INTERSTATE BAKERIES CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS DEFICIT
(UNAUDITED)  (dollars and shares in thousands)
 Common
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedStock Issued
    
    
    Additional
    
    
    
    
    
    
    Treasury Stock
    
    
    Other
    
    
    TotalNumber
    
    
    Par
    
    
    Paid-in
    
    
    Accumulated
    
    
    Number of
    
    
    
    
    
    
    Comprehensive
    
    
    Stockholdersof Shares
    
    
    Value
    
    
    Capital
    
    
    Deficit
    
    
    Shares
    
    
    Cost
    
    
    Income
    
    
    DeficitBalance June 2, 2007
    
    
    81,579
    
    
    $
    816
    
    
    $
    584,503
    
    
    $
    (255,559
    )
    
    
    (36,330
    )
    
    $
    (678,721
    )
    
    $
    30,220
    
    
    $
    (318,741
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (122,981
    )
    
    
    
    
    
    
    
    
    
    
    (4,894
    )
    
    
    (127,875
    )Cumulative effect of
change in accounting for
uncertainty in income
taxes pursuant to FIN
No. 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,649
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,649
    )Restricted share
compensation expense
    
    
    
    
    
    
    
    
    
    
    622
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    622Restricted share surrenders
    
    
    
    
    
    
    
    
    
    
    (635
    )
    
    
    
    
    
    
    (46
    )
    
    
    (18
    )
    
    
    
    
    
    
    (653
    )Balance March 8, 2008
    
    
    81,579
    
    
    $
    816
    
    
    $
    584,490
    
    
    $
    (382,189
    )
    
    
    (36,376
    )
    
    $
    (678,739
    )
    
    $
    25,326
    
    
    $
    (450,296
    )
  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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##### 



8




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##### 



Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code
 2. Description of Business and Significant Accounting Policies
 Description of Business
  9




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##### 



Significant Accounting Policies
 Significant Accounting Policies
 Fiscal Year End
  Principles of Consolidation
  Use of Estimates
  Cash and Cash Equivalents
  Contingencies
 Accounting for Contingencies
 Certain Concentrations of Risk
   Newly Adopted Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
 10




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##### 



Recently Issued Accounting Pronouncements
 Disclosures about Derivative Instruments and Hedging
Activities an amendment of FASB Statement No. 133
 Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No.51
 Business Combinations
 The Fair Value Option for Financial Assets and
Liabilities
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans
 Fair Value Measurements
 11




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##### 



3. Inventories
  March 8,
    
    
    June 2,2008
    
    
    2007(dollars in thousands)Ingredients and packaging
    
    $
    35,677
    
    
    $
    43,279Finished goods
    
    
    21,879
    
    
    
    22,403$
    57,556
    
    
    $
    65,682
 4. Property and Equipment
  March 8,
    
    
    June 2,2008
    
    
    2007(dollars in thousands)Land and buildings (lives ranging from 10 to 35 years)
    
    $
    358,474
    
    
    $
    390,147Machinery and equipment (lives ranging from 4 to 15 years)
    
    
    829,493
    
    
    
    865,3981,187,967
    
    
    
    1,255,545Less accumulated depreciation
    
    
    (713,084
    )
    
    
    (713,820
    )$
    474,883
    
    
    $
    541,725
   5. Assets Held for Sale
  12




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##### 



6. Lease Obligations
   7. Intangible Assets
   March 8,
    
    
    June 2,2008
    
    
    2007(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
    
    
    (11,513
    )
    
    
    (11,086
    )Deferred contract asset adjustment and impairment
    
    
    (1,160
    )
    
    
    Net carrying amount
    
    $
    1,181
    
    
    $
    2,768
   13




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##### 



8. Debt
  March 8,
    
    
    June 2,2008
    
    
    2007(dollars in thousands)SecuredPost-petition credit facility
    
    $
    9,000
    
    
    $
    Pre-petition credit facility
    
    
    450,248
    
    
    
    447,757Unsecured6% senior subordinated convertible notes  pre-petition
    
    
    99,999
    
    
    
    99,999Capital lease converted to pre-petition debt
    
    
    6,125
    
    
    
    6,125Capital leasesReal estate
    
    
    2,949
    
    
    
    3,758568,321
    
    
    
    557,639Less:Current portion
    
    
    (462,197
    )
    
    
    (451,515
    )Pre-petition claims included in liabilities subject to compromise
    
    
    (106,124
    )
    
    
    (106,124
    )Long-term and post-petition debt
    
    $
    
    
    
    $
    
 Post-Petition Credit Facility
    14




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##### 



Pre-Petition Credit Facility
   15




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##### 



6% Senior Subordinated Convertible Notes
  Other Matters
  Financial Reporting by
Entities in Reorganization under the Bankruptcy Code
  9. Derivative Instruments
    Accounting for Derivative
Instruments and Hedging Activities
  16




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##### 



10. Liabilities Subject to Compromise
     March 8,
    
    
    June 2,2008
    
    
    2007(dollars in thousands)Accounts payable
    
    $
    130,845
    
    
    $
    130,732Taxes payable
    
    
    4,704
    
    
    
    5,741Retirement obligations (SERP and deferred compensation)
    
    
    19,097
    
    
    
    15,063Legal reserve
    
    
    13,924
    
    
    
    13,819Interest bearing debt and capital leases
    
    
    106,124
    
    
    
    106,124Other
    
    
    24,060
    
    
    
    19,074$
    298,754
    
    
    $
    290,553
  17




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##### 



11. Employee Benefit Plans
 American Bakers Association Retirement Plan
       Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 8,
    
    
    March 10,
    
    
    March 8,
    
    
    March 10,2008
    
    
    2007
    
    
    2008
    
    
    2007(dollars in thousands)Service cost
    
    $
    313
    
    
    $
    348
    
    
    $
    781
    
    
    $
    870Interest cost
    
    
    1,099
    
    
    
    1,035
    
    
    
    2,749
    
    
    
    2,587Expected return on negative plan assets
    
    
    225
    
    
    
    112
    
    
    
    561
    
    
    
    280Net pension expense
    
    $
    1,637
    
    
    $
    1,495
    
    
    $
    4,091
    
    
    $
    3,737
 18




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##### 



Defined Benefit Pension Plan, Postretirement Health and Life Plans, and Supplemental Executive
Retirement Plan
 Defined Benefit Pension Plan
  Postretirement Health and Life Plans
   Supplemental Executive Retirement Plan
    Sixteen Weeks EndedPension
    
    
    Postretirement
    
    
    SERPMarch 8,
    
    
    March 10,
    
    
    March 8,
    
    
    March 10,
    
    
    March 8,
    
    
    March 10,2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007(dollars in thousands)Service cost
    
    $
    260
    
    
    $
    284
    
    
    $
    350
    
    
    $
    226
    
    
    $
    
    
    
    $
    Interest cost
    
    
    1,242
    
    
    
    1,221
    
    
    
    995
    
    
    
    929
    
    
    
    426
    
    
    
    422Expected return on plan assets
    
    
    (1,720
    )
    
    
    (1,662
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service
cost (credit)
    
    
    84
    
    
    
    85
    
    
    
    (2,274
    )
    
    
    (2,274
    )
    
    
    
    
    
    
    Recognized net actuarial (gain)
loss
    
    
    
    
    
    
    10
    
    
    
    255
    
    
    
    278
    
    
    
    (22
    )
    
    
    Net periodic benefit cost (credit)
    
    $
    (134
    )
    
    $
    (62
    )
    
    $
    (674
    )
    
    $
    (841
    )
    
    $
    404
    
    
    $
    422
 19




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##### 



Forty Weeks EndedPension
    
    
    Postretirement
    
    
    SERPMarch 8,
    
    
    March 10,
    
    
    March 8,
    
    
    March 10,
    
    
    March 8,
    
    
    March 10,2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007(dollars in thousands)Service cost
    
    $
    650
    
    
    $
    710
    
    
    $
    876
    
    
    $
    822
    
    
    $
    
    
    
    $
    Interest cost
    
    
    3,106
    
    
    
    3,053
    
    
    
    2,488
    
    
    
    2,595
    
    
    
    1,064
    
    
    
    1,054Expected return on plan assets
    
    
    (4,300
    )
    
    
    (4,154
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service
cost (credit)
    
    
    210
    
    
    
    211
    
    
    
    (5,685
    )
    
    
    (5,686
    )
    
    
    
    
    
    
    Recognized net actuarial (gain)
loss
    
    
    
    
    
    
    24
    
    
    
    637
    
    
    
    762
    
    
    
    (56
    )
    
    
    Net periodic benefit cost (credit)
    
    $
    (334
    )
    
    $
    (156
    )
    
    $
    (1,684
    )
    
    $
    (1,507
    )
    
    $
    1,008
    
    
    $
    1,054
 12. Stock-Based Compensation
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
  1996 Stock Incentive Plan
   Weighted
    
    WeightedAverage
    
    Average
    
    Aggregate IntrinsicExercise Price
    
    Remaining
    
    ValueShares
    
    Per Share
    
    Contractual Term
    
    at Grant Date(dollars in(in thousands)
    
    
    
    
    
    
    
    
    
    thousands)Outstanding, as of June 2, 2007
    
    
    3,264
    
    
    $
    15.69
    
    
    
    4.2
    
    
    $
    23,280Granted
    
    
    
    
    
    
    Surrendered
    
    
    (659
    )
    
    
    20.01Exercised
    
    
    
    
    
    
    Outstanding, as of March 8, 2008
    
    
    2,605
    
    
    
    14.60
    
    
    
    3.7
    
    
    
    17,635Exercisable at March 8, 2008
    
    
    2,605
    
    
    
    14.60
    
    
    
    3.7
    
    
    
    17,635
 20




---



##### 



WeightedAverageFair Value atShares
    
    Grant Date(in thousands)Nonvested, as of June 2, 2007
    
    
    73
    
    
    $
    14.46Granted
    
    
    
    
    
    
    Vested
    
    
    (27
    )
    
    
    14.80Surrendered
    
    
    (46
    )
    
    
    14.25Nonvested, as of March 8, 2008
    
    
    
    
    
    
    
  13. Restructuring Charges (Credits)
  Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 8,
    
    
    March 10,
    
    
    March 8,
    
    
    March 10,2008
    
    
    2007
    
    
    2008
    
    
    2007(dollars in thousands)Severance charges
    
    $
    (286
    )
    
    $
    (680
    )
    
    $
    7,309
    
    
    $
    (384
    )Long-lived asset (credits) charges
    
    
    (817
    )
    
    
    4
    
    
    
    (1,310
    )
    
    
    (5,191
    )Other exit costs
    
    
    1,329
    
    
    
    430
    
    
    
    2,108
    
    
    
    1,665Total
    
    $
    226
    
    
    $
    (246
    )
    
    $
    8,107
    
    
    $
    (3,910
    )
 Fiscal 2008 Activity
   21




---



##### 



Severance and
    
    Long-LivedRelated
    
    AssetBenefits
    
    Charges(Charges)
    
    (Credits)
    
    Other
    
    Total(dollars in thousands)Fiscal 2005 Consolidation
& RIF PlanBalance June 2, 2007
    
    $
    10
    
    
    $
    
    
    
    $
    
    
    
    $
    10Expensed in Fiscal 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash Paid in Fiscal 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Noncash Utilization in 2008
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    (10
    )Balance March 8, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Fiscal 2005 Profit Center
Review PlanBalance June 2, 2007
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    4Expensed in Fiscal 2008
    
    
    (11
    )
    
    
    (493
    )
    
    
    167
    
    
    
    (337
    )Cash Paid in Fiscal 2008
    
    
    11
    
    
    
    
    
    
    
    (167
    )
    
    
    (156
    )Noncash Utilization in 2008
    
    
    (4
    )
    
    
    493
    
    
    
    
    
    
    
    489Balance March 8, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Fiscal 2006 Profit Center
Review PlanBalance June 2, 2007
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    60Expensed in Fiscal 2008
    
    
    761
    
    
    
    
    
    
    
    17
    
    
    
    778Cash Paid in Fiscal 2008
    
    
    (10
    )
    
    
    
    
    
    
    (17
    )
    
    
    (27
    )Noncash Utilization in 2008
    
    
    (811
    )
    
    
    
    
    
    
    
    
    
    
    (811
    )Balance March 8, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accounting Office ClosingsBalance June 2, 2007
    
    
    43
    
    
    
    
    
    
    
    9
    
    
    
    52Expensed in Fiscal 2008
    
    
    (25
    )
    
    
    
    
    
    
    
    
    
    
    (25
    )Cash Paid in Fiscal 2008
    
    
    (23
    )
    
    
    
    
    
    
    
    
    
    
    (23
    )Noncash Utilization in 2008
    
    
    5
    
    
    
    
    
    
    
    (9
    )
    
    
    (4
    )Balance March 8, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 22




---



##### 



Severance and
    
    Long-LivedRelated
    
    AssetBenefits
    
    Charges(Charges)
    
    (Credits)
    
    Other
    
    Total(dollars in thousands)FY 2008 Southern CaliforniaBalance June 2, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expensed in Fiscal 2008
    
    
    5,508
    
    
    
    (817
    )
    
    
    1,536
    
    
    
    6,227Cash Paid in Fiscal 2008
    
    
    (4,735
    )
    
    
    
    
    
    
    (1,536
    )
    
    
    (6,271
    )Noncash Utilization in 2008
    
    
    
    
    
    
    817
    
    
    
    
    
    
    
    817Balance March 8, 2008
    
    
    773
    
    
    
    
    
    
    
    
    
    
    
    773FY 2008 Sales
ReorganizationBalance June 2, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expensed in Fiscal 2008
    
    
    1,076
    
    
    
    
    
    
    
    388
    
    
    
    1,464Cash Paid in Fiscal 2008
    
    
    (828
    )
    
    
    
    
    
    
    (180
    )
    
    
    (1,008
    )Noncash Utilization in 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance March 8, 2008
    
    
    248
    
    
    
    
    
    
    
    208
    
    
    
    456ConsolidatedBalance June 2, 2007
    
    
    117
    
    
    
    
    
    
    
    9
    
    
    
    126Expensed in Fiscal 2008
    
    
    7,309
    
    
    
    (1,310
    )
    
    
    2,108
    
    
    
    8,107Cash Paid in Fiscal 2008
    
    
    (5,585
    )
    
    
    
    
    
    
    (1,900
    )
    
    
    (7,485
    )Noncash Utilization in 2008
    
    
    (820
    )
    
    
    1,310
    
    
    
    (9
    )
    
    
    481Balance March 8, 2008
    
    $
    1,021
    
    
    $
    
    
    
    $
    208
    
    
    $
    1,229
 Fiscal 2007 Activity
     23




---



##### 



Long-LivedSeverance
    
    Assetand Related
    
    ChargesBenefits
    
    (Credits)
    
    Other
    
    TotalFiscal 2005 Consolidation & RIF Plan
    
    $
    5,583
    
    
    $
    6,473
    
    
    $
    2,812
    
    
    $
    14,868Fiscal 2005 Profit Center Review Plan
    
    
    6,854
    
    
    
    18,796
    
    
    
    (3,917
    )
    
    
    21,733Fiscal 2006 Profit Center Review Plan
    
    
    6,684
    
    
    
    (20,620
    )
    
    
    3,662
    
    
    
    (10,274
    )Accounting Office Closings
    
    
    479
    
    
    
    
    
    
    
    55
    
    
    
    534Fiscal 2008 Southern California
    
    
    5,508
    
    
    
    (817
    )
    
    
    1,536
    
    
    
    6,227FY 2008 Sales Reorganization
    
    
    1,076
    
    
    
    
    
    
    
    388
    
    
    
    1,464
  Long-LivedSeverance
    
    Assetand Related
    
    ChargesBenefits
    

(Credits)
(1)
    
    Other
    
    TotalFiscal 2008 Southern California
    
    $
    
    
    
    $
    
    
    
    $
    2,550
    
    
    $
    2,550
 
 (1)
    
    Excludes gains expected to be realized on subsequent sales of
property and equipment. 14. Reorganization Charges
  March 8, 2008Sixteen Weeks
    
    
    Forty WeeksEnded
    
    
    EndedReorganization
    
    
    Reorganization
    
    
    CashCharges
    
    
    Charges
    
    
    Payments(dollars in thousands)Professional fees
    
    $
    14,181
    
    
    $
    34,135
    
    
    $
    27,336Employee retention expenses (credits)
    
    
    (54
    )
    
    
    (205
    )
    
    
    354Lease rejection charges
    
    
    364
    
    
    
    630
    
    
    
    26Interest income
    
    
    (448
    )
    
    
    (1,431
    )
    
    
    (1,076
    )Gain on sale of assets
    
    
    (1,439
    )
    
    
    (1,620
    )
    
    
    (1,620
    )Write-off of debt fees and expenses
    
    
    5,300
    
    
    
    5,300
    
    
    
    Reorganization charges, net
    
    $
    17,904
    
    
    $
    36,809
    
    
    $
    25,020
 24




---



##### 



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
 15. Income Taxes
  Forty Weeks EndedMarch 8,
    
    March 10,2008
    
    2007Statutory federal tax rate
    
    
    35.0
    %
    
    
    35.0
    %State income tax, net
    
    
    2.5
    
    
    
    1.1Valuation allowance increase
    
    
    (30.0
    )
    
    
    (30.9
    )Adjustments to prior year tax accruals
    
    
    
    
    
    
    0.3Other
    
    
    (4.9
    )
    
    
    (1.7
    )2.6
    %
    
    
    3.8
    %
    25




---



##### 



16. Commitments and Contingencies
    26




---



##### 



27




---



##### 



28




---



##### 



17. Earnings (Loss) per Share
 Earnings per
Share
 29




---



##### 



Sixteen Weeks Ended
    
    Forty Weeks EndedMarch 8,
    
    March 10,
    
    March 8,
    
    March 10,2008
    
    2007
    
    2008
    
    2007(in thousands)Weighted average common shares outstanding:Basic and diluted
    
    
    45,197
    
    
    
    45,169
    
    
    
    45,190
    
    
    
    45,167
   18. Comprehensive Loss
  Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 8,
    
    
    March 10,
    
    
    March 8,
    
    
    March 10,2008
    
    
    2007
    
    
    2008
    
    
    2007(dollars in thousands)Net loss
    
    $
    (67,827
    )
    
    $
    (42,235
    )
    
    $
    (122,981
    )
    
    $
    (94,851
    )Other comprehensive loss:Amortization of pension and other postretirement net credits
    
    
    (1,958
    )
    
    
    
    
    
    
    (4,894
    )
    
    
    Comprehensive loss
    
    $
    (69,785
    )
    
    $
    (42,235
    )
    
    $
    (127,875
    )
    
    $
    (94,851
    )
 30




---



##### 



19. Segment Information
 Disclosures about Segments of an Enterprise and Related Information
  Route sales
 Outlet sales
 Direct sales
   31




---



##### 



Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 8,
    
    
    March 10,
    
    
    March 8,
    
    
    March 10,2008
    
    
    2007 (A)
    
    
    2008 (B)
    
    
    2007 (A)(B)(dollars in thousands)Net SalesRoute sales
    
    $
    701,787
    
    
    $
    756,113
    
    
    $
    1,856,324
    
    
    $
    1,934,219Outlet sales
    
    
    83,621
    
    
    
    93,064
    
    
    
    225,923
    
    
    
    247,940Direct sales
    
    
    20,874
    
    
    
    12,464
    
    
    
    58,967
    
    
    
    35,640Total net sales
    
    $
    806,282
    
    
    $
    861,641
    
    
    $
    2,141,214
    
    
    $
    2,217,799Segment IncomeRoute sales
    
    $
    (17,768
    )
    
    $
    3,687
    
    
    $
    11,890
    
    
    $
    16,282Outlet sales
    
    
    2,858
    
    
    
    1,556
    
    
    
    15,298
    
    
    
    6,557Direct sales
    
    
    1,739
    
    
    
    706
    
    
    
    5,487
    
    
    
    2,899Total segment income
    
    
    (13,171
    )
    
    
    5,949
    
    
    
    32,675
    
    
    
    25,738Corporate
    
    
    (23,238
    )
    
    
    (25,615
    )
    
    
    (86,094
    )
    
    
    (59,914
    )Total operating loss
    
    
    (36,409
    )
    
    
    (19,666
    )
    
    
    (53,419
    )
    
    
    (34,176
    )Interest expense
    
    
    13,735
    
    
    
    14,673
    
    
    
    36,018
    
    
    
    38,831Reorganization charges
    
    
    17,904
    
    
    
    9,980
    
    
    
    36,809
    
    
    
    26,687Other income
    
    
    (45
    )
    
    
    (44
    )
    
    
    29
    
    
    
    (1,120
    )31,594
    
    
    
    24,609
    
    
    
    72,856
    
    
    
    64,398Loss before income taxes
    
    
    (68,003
    )
    
    
    (44,275
    )
    
    
    (126,275
    )
    
    
    (98,574
    )Provision (benefit) for income taxes
    
    
    (176
    )
    
    
    (2,040
    )
    
    
    (3,294
    )
    
    
    (3,723
    )Net loss
    
    $
    (67,827
    )
    
    $
    (42,235
    )
    
    $
    (122,981
    )
    
    $
    (94,851
    )
 
 (A)
    
    Prior years amounts have been revised to reflect the current fiscal years segment
reporting presentation.(B)
    
    The corporate operating loss for the forty weeks ended March 8, 2008 includes
approximately $22.0 million for restructuring activities, loss on sale or abandonment, and
impairment of fixed assets. For the same period of the prior year we have a net credit of
approximately $1.2 million related to restructuring credits and loss on sale or
abandonment. 20. Subsequent Events
   32




---



##### 



33




---



##### 



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
  OVERVIEW OF CERTAIN TRENDS AND EVENTS AFFECTING OPERATIONS, FINANCIAL POSITION AND LIQUIDITY
  CRITICAL ACCOUNTING POLICIES
 Critical Accounting Policies
 34




---



##### 



RESULTS OF OPERATIONS
  Sixteen Weeks Ended
    
    Forty Weeks EndedMarch 8,
    
    March 10,
    
    March 8,
    
    March 10,2008
    
    2007
    
    2008
    
    2007Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of products sold (exclusive of items
shown below)
    
    
    51.7
    
    
    
    51.1
    
    
    
    50.9
    
    
    
    51.4Selling, delivery and administrative expenses
    
    
    49.7
    
    
    
    48.4
    
    
    
    48.2
    
    
    
    47.7Restructuring (credits) charges
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    
    (0.2
    )Depreciation and amortization
    
    
    2.6
    
    
    
    2.6
    
    
    
    2.4
    
    
    
    2.5Loss on sale or abandonment of assets
    
    
    0.4
    
    
    
    0.2
    
    
    
    0.1
    
    
    
    0.1Property and equipment impairment
    
    
    0.1
    
    
    
    
    
    
    
    0.5
    
    
    
    Operating loss
    
    
    (4.5
    )
    
    
    (2.3
    )
    
    
    (2.5
    )
    
    
    (1.5
    )Interest expense
    
    
    1.7
    
    
    
    1.7
    
    
    
    1.7
    
    
    
    1.8Reorganization charges
    
    
    2.2
    
    
    
    1.1
    
    
    
    1.7
    
    
    
    1.2Other (income) expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )Loss before income taxes
    
    
    (8.4
    )
    
    
    (5.1
    )
    
    
    (5.9
    )
    
    
    (4.4
    )Income taxes
    
    
    
    
    
    
    (0.2
    )
    
    
    (0.2
    )
    
    
    (0.1
    )Net loss
    
    
    (8.4
    )%
    
    
    (4.9
    )%
    
    
    (5.7
    )%
    
    
    (4.3
    )%
 Net Sales
 (dollars in thousands)
 Sixteen Weeks Ended
    
    Forty Weeks Ended%
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    %March 8,
    
    
    
    
    
    March 10,
    
    
    
    
    
    Increase /
    
    March 8,
    
    
    
    
    
    March 10,
    
    
    
    
    
    Increase /2008
    
    %
    
    2007
    
    %
    
    (Decrease)
    
    2008
    
    %
    
    2007
    
    %
    
    (Decrease)Route sales
    
    $
    701,787
    
    
    
    87.0
    %
    
    $
    756,113
    
    
    
    87.7
    %
    
    
    (7.2
    )%
    
    $
    1,856,324
    
    
    
    86.7
    %
    
    $
    1,934,219
    
    
    
    87.2
    %
    
    
    (4.0
    )%Outlet sales
    
    
    83,621
    
    
    
    10.4
    
    
    
    93,064
    
    
    
    10.8
    
    
    
    (10.2
    )
    
    
    225,923
    
    
    
    10.5
    
    
    
    247,940
    
    
    
    11.2
    
    
    
    (8.9
    )Direct sales
    
    
    20,874
    
    
    
    2.6
    
    
    
    12,464
    
    
    
    1.5
    
    
    
    67.5
    
    
    
    58,967
    
    
    
    2.8
    
    
    
    35,640
    
    
    
    1.6
    
    
    
    65.5Total net sales
    
    $
    806,282
    
    
    
    100.0
    %
    
    $
    861,641
    
    
    
    100.0
    %
    
    
    (6.4
    )%
    
    $
    2,141,214
    
    
    
    100.0
    %
    
    $
    2,217,799
    
    
    
    100.0
    %
    
    
    (3.5
    )%
 Reportable Segments
    35




---



##### 



Consolidated Net Sales
  Route net sales.
 Outlet net sales.
 Direct net sales.
 Gross Profit (exclusive of depreciation and amortization)
   36




---



##### 



Selling, Delivery and Administrative Expenses
    Restructuring Charges (Credits)
   37




---



##### 



Property and Equipment Impairment
  Operating Loss
 (dollars in thousands)
 Sixteen Weeks Ended
    
    Forty Weeks EndedMarch 8,
    
    
    
    
    
    March 10,
    
    
    
    
    
    March 8,
    
    
    
    
    
    March 10,2008
    
    %
    
    2007
    
    %
    
    2008
    
    %
    
    2007
    
    %Segment IncomeRoute sales
    
    $
    (17,768
    )
    
    
    48.8
    %
    
    $
    3,687
    
    
    
    (18.8
    )%
    
    $
    11,890
    
    
    
    (22.3
    )%
    
    $
    16,282
    
    
    
    (47.6
    )%Outlet sales
    
    
    2,858
    
    
    
    (7.8
    )
    
    
    1,556
    
    
    
    (7.9
    )
    
    
    15,298
    
    
    
    (28.6
    )
    
    
    6,557
    
    
    
    (19.2
    )Direct sales
    
    
    1,739
    
    
    
    (4.8
    )
    
    
    706
    
    
    
    (3.6
    )
    
    
    5,487
    
    
    
    (10.3
    )
    
    
    2,899
    
    
    
    (8.5
    )Total segment income
    
    
    (13,171
    )
    
    
    36.2
    
    
    
    5,949
    
    
    
    (30.3
    )
    
    
    32,675
    
    
    
    (61.2
    )
    
    
    25,738
    
    
    
    (75.3
    )Corporate
    
    
    (23,238
    )
    
    
    63.8
    
    
    
    (25,615
    )
    
    
    130.3
    
    
    
    (86,094
    )
    
    
    161.2
    
    
    
    (59,914
    )
    
    
    175.3Total operating loss
    
    $
    (36,409
    )
    
    
    100.0
    %
    
    $
    (19,666
    )
    
    
    100.0
    %
    
    $
    (53,419
    )
    
    
    100.0
    %
    
    $
    (34,176
    )
    
    
    100.0
    %
 Consolidated Operating Loss
  38




---



##### 



Route operating income.
 Outlet operating income.
 Direct operating income.
 Reorganization Charges
    39




---



##### 



Interest Expense
   Provision (Benefit) for Income Taxes
 Accounting for Uncertainty in Income Taxes  an
interpretation of FASB Statement No. 109
 CASH RESOURCES AND LIQUIDITY
 CASH FLOWS
  Cash Used In Operating Activities
  Cash From (Used In) Investing Activities
  40




---



##### 



Cash From (Used In) Financing Activities
  SOURCES OF LIQUIDITY AND CAPITAL
      41




---



##### 



DIP Facility
         42




---



##### 



43




---



##### 



OFF-BALANCE SHEET FINANCING
  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
      RECENT ACCOUNTING PRONOUNCEMENTS
  
 FORWARD-LOOKING STATEMENTS
  44




---



##### 




    
    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 successfully negotiate an extension and increase in the amount available under our DIP
Facility, which, pursuant to an extension, expires on June 2, 2008;
    
    our ability to implement our business plan developed as a basis for our discussion regarding one or
more plans of reorganization;
    
    our ability to obtain concessions from our unionized workforce to reduce costs and allow for greater
flexibility in the method and manner of distributing our products;
    
    our ability to develop, propose, confirm, and consummate one or more plans of reorganization with
respect to the Chapter 11 proceeding;
    
    our ability to obtain the financing necessary to implement our business plan and emerge from Chapter 11;
    
    risks associated with third parties seeking and obtaining court approval for the appointment of a
Chapter 11 trustee or to convert the Chapter 11 proceeding to a Chapter 7 proceeding;
    
    risks associated with cost increases in materials, ingredients, energy, and employee wages and benefits;
    
    risks associated with our restructuring activities, including the risks associated with achieving the
desired savings in connection with our profit center restructuring and bakery and route consolidations
and desired results of the initiatives currently being implemented;
    
    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 manage our exposure to price increases with respect to various
ingredients and energy through our hedging strategies;
    
    our ability to attract, motivate and/or retain key executives and employees;
    
    changes in our relationship with employees and the unions that represent them;
    
    successful implementation of information technology improvements;
    
    increased costs and uncertainties with respect to the ABA Plan;
    
    successful remediation of material weaknesses in our internal controls;
    
    the continuing effects of changes in consumers eating habits;
    
    the performance of our recent and planned 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.
 45




---



##### 



Bankruptcy-Related Factors
 
    
    the evaluation of various alternatives, including, but not limited to, the sale of the Company or
some or all of our assets, infusion of capital, debt restructuring, amending the plan of
reorganization previously filed with the Bankruptcy Court, filing a new plan of reorganization, or
any combination of these options;
    
    our ability to formulate a rational strategy for maximizing value of the bankruptcy estates,
including a sale of the Company and/or its assets in its entirety or in a series of transactions;
    
    the terms of any reorganization plan ultimately confirmed;
    
    our ability to implement our business plan developed as a basis for our discussion regarding one
or more plans of reorganization;
    
    the 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 those
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 is and 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 the Company or some or all of our assets, infusion of capital and debt restructuring or
any combination of these options;
    
    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 policies and promotional spending;
 46




---



##### 




    
    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 processing systems;
    
    changes in general economic and business conditions (including 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;
    
    our ability to obtain concessions from our unionized workforce to reduce costs and allow for greater
flexibility in the method and manner of distributing our products;
    
    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 and planned 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 without limitation
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.
 47




---



##### 



Item 3. Quantitative and Qualitative Disclosure about Market Risk
  Commodity Prices
  
 Item 4. Controls and Procedures
    48




---



##### 



49




---



##### 



PART II. OTHER INFORMATION
 
 Item 1A. Risk Factors
 We face uncertainty regarding the adequacy of our capital resources, including liquidity, and have
limited access to additional financing.
  
     The inability to completely withdraw from the ABA Plan while operating under the provisions of
Chapter 11 of the Bankruptcy Code could jeopardize our ability to emerge from bankruptcy and
threaten our viability if we emerge.
   50




---



##### 



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).3.1.1
    
    Certificate of Amendment to the Restated Certificate of Incorporation
of Interstate Bakeries Corporation (incorporated herein 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 herein by reference to Exhibit 3.2 to
Interstate Bakeries Corporations Form 8-K filed on March 21, 2007).4.1
    
    Preferred Stock Purchase Rights Agreement effective as of May 8, 2000
(incorporated herein by reference to the Current Report on Form 8-K of
Interstate Bakeries Corporation filed on May 16, 2000).10.1
    
    Employment Agreement by and among Interstate Bakeries Corporation,
Interstate Brands Corporation and Craig D. Jung, dated January 30,
2007 (incorporated herein by reference to Exhibit 10.1 to Interstate
Bakeries Corporations Form 8-K filed on January 31, 2007).10.2
    
    Employment Agreement, dated as of April 25, 2007, by and among
Interstate Brands Corporation, Interstate Bakeries Corporation and
Kent B. Magill (incorporated herein by reference to Exhibit 10.1 to
Interstate Bakeries Corporations Form 8-K filed on June 6, 2007).10.3
    
    Employment Agreement dated as of March 8, 2003 by and between Michael
D. Kafoure and Interstate Brands West Corporation (incorporated herein
by reference to Exhibit 10.2 to Interstate Bakeries Corporations
Quarterly Report on Form 10-Q for the quarter ended March 8, 2003,
filed April 22, 2003).10.4
    
    Employment Agreement dated as of March 7, 2003 by and between Robert
P. Morgan and Interstate Brands Corporation (incorporated herein by
reference to Exhibit 10.3 to Interstate Bakeries Corporations
Quarterly Report on Form 10-Q for the quarter ended March 8, 2003,
filed April 22, 2003).10.5
    
    Employment Agreement dated as of March 18, 2003 by and between Richard
D. Willson and Interstate Brands West Corporation (incorporated herein
by reference to Exhibit 10.4 to Interstate Bakeries Corporations
Quarterly Report on Form 10-Q for the quarter ended March 8, 2003,
filed April 22, 2003).10.6
    
    Form of Management Continuity Agreement effective as of February 3,
2003 by and between Interstate Bakeries Corporation and Michael D.
Kafoure, Kent B. Magill, Robert P. Morgan and Richard D. Willson
(incorporated herein by reference to Exhibit 10.7 to Interstate
Bakeries Corporations Quarterly Report on Form 10-Q for the quarter
ended March 8, 2003, filed April 22, 2003).10.7
    
    Amended and Restated Credit Agreement among Interstate Bakeries
Corporation, as a Guarantor, Interstate Brands Corporation and
Interstate Brands West Corporation, each as a Borrower, the several
Lenders from time to time parties hereto, and The Chase Manhattan
Bank, as Administrative Agent, dated as of April 25, 2002
(incorporated herein by reference to Exhibit 10.3
 51




---



##### 



Exhibit No.
    
    Exhibitto Interstate Bakeries Corporations Amendment No. 2 to its Registration Statement
on Form S-3, File No. 333-86560, filed May 8, 2002).10.7.1
    
    First Amendment, dated as of April 21, 2003, to the Amended and
Restated Credit Agreement among Interstate Bakeries Corporation, as a
Guarantor, Interstate Brands Corporation and Interstate Brands West
Corporation, each as a Borrower, the several Lenders from time to time
parties hereto, and The Chase Manhattan Bank, as Administrative Agent
(incorporated herein by reference to Exhibit 10.1 to Interstate
Bakeries Corporations Quarterly Report on Form 10-Q for the quarter
ended March 8, 2003, filed April 22, 2003).10.7.2
    
    Second Amendment, dated as of May 7, 2004, to the Amended and Restated
Credit Agreement among Interstate Bakeries Corporation, as a
Guarantor, Interstate Brands Corporation and Interstate Brands West
Corporation, each as a Borrower, the several Lenders from time to time
parties hereto, and The Chase Manhattan Bank, as Administrative Agent
(incorporated herein by reference to Exhibit 10.1 to the Current
Report on Form 8-K of Interstate Bakeries Corporation filed on August
12, 2004).10.7.3
    
    Third Amendment, dated as of May 27, 2004, to the Amended and Restated
Credit Agreement among Interstate Bakeries Corporation, as a
Guarantor, Interstate Brands Corporation and Interstate Brands West
Corporation, each as a Borrower, the several Lenders from time to time
parties hereto, and The Chase Manhattan Bank, as Administrative Agent
(incorporated herein by reference to Exhibit 10.2 to the Current
Report on Form 8-K of Interstate Bakeries Corporation filed on August
12, 2004).10.7.4
    
    Fourth Amendment, dated as of June 17, 2004, to the Amended and
Restated Credit Agreement among Interstate Bakeries Corporation, as a
Guarantor, Interstate Brands Corporation and Interstate Brands West
Corporation, each as a Borrower, the several Lenders from time to time
parties hereto, and The Chase Manhattan Bank, as Administrative Agent
(incorporated herein by reference to Exhibit 10.3 to the Current
Report on Form 8-K of Interstate Bakeries Corporation filed on August
12, 2004).10.7.5
    
    Fifth Amendment, dated as of August 12, 2004, to the Amended and Restated Credit
Agreement among Interstate Bakeries Corporation, as a Guarantor, Interstate Brands
Corporation and Interstate Brands West Corporation, each as a Borrower, the several
Lenders from time to time parties hereto, and The Chase Manhattan Bank, as
Administrative Agent (incorporated herein by reference to Exhibit 10.4 to the Current
Report on Form 8-K of Interstate Bakeries Corporation filed on August 12, 2004).10.7.6
    
    Sixth Amendment, dated as of September 7, 2004, to the Amended and Restated Credit
Agreement, dated April 25, 2002, among Interstate Bakeries Corporation, as a
Guarantor, Interstate Brands Corporation and Interstate Brands West Corporation, each
as a Borrower, the several Lenders from time to time parties thereto, The Bank of Nova
Scotia, BNP Paribas, Cooperatieve Central Raiffeisen-Boerenleenbank B.A., Rabobank
International, New York Branch, and SunTrust Bank, each as a co-documentation agent,
Bank of America, N.A., as syndication agent and JPMorgan Chase Bank, as administrative
agent (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form
8-K of Interstate Bakeries Corporation filed on September 13, 2004).10.7.7
    
    Seventh Amendment to the Amended and Restated Credit Agreement dated as of March 18,
2005, by and among the Interstate Bakeries Corporation, Interstate Brands Corporation
(the Borrower), the several banks and other financial institutions or entities from
time to time parties thereto (the Lenders), The Bank of Nova Scotia, BNP Paribas,
Cooperatieve Central Raiffeisen-Boerenleenbank B.A., Rabobank International, New
York Branch, and SunTrust Bank, each as a co-documentation agent (the
Co-Documentation Agents), Bank of America, N.A., as syndication agent (the
Syndication Agent) and JPMorgan Chase Bank (JPMorgan), as administrative agent
(incorporated herein by reference to the Current Report on Form 8-K of Interstate
Bakeries
 52




---



##### 



Exhibit No.
    
    ExhibitCorporation filed on March 22, 2005).10.8
    
    Guarantee and Collateral Agreement made by Interstate Bakeries Corporation, Interstate
Brands Corporation, Interstate Brands West Corporation and certain of their
Subsidiaries, in favor of The Chase Manhattan Bank, as Administrative Agent, dated as
of July 19, 2001 (incorporated herein by reference to Exhibit 10.4 to the Annual
Report on Form 10-K of Interstate Bakeries Corporation filed on August 24, 2001).10.9
    
    Amended and Restated Interstate Bakeries Corporation 1996 Stock Incentive Plan
(incorporated herein by reference to Exhibit 10.1 to Interstate Bakeries Corporations
Quarterly Report on Form 10-Q for the quarter ended March 6, 2004 filed on April 19,
2004).10.10
    
    Interstate Bakeries Corporation Incentive Compensation Plan (incorporated herein by
reference to Interstate Bakeries Corporation Amendment No. 2 to its Registration
Statement on Form S-3, File No. 333-86560, filed on May 8, 2002).10.11
    
    Interstate Bakeries Corporation Amended and Restated Supplemental
Retirement Plan (incorporated herein by reference to Exhibit 10.15 to
Interstate Bakeries Corporations Annual Report on Form 10-K for the
year ended May 29, 2004, filed October 6, 2006).10.12
    
    Interstate Bakeries Corporation Rabbi Trust Agreement (incorporated
herein by reference to Exhibit 10.8 to the Annual Report on Form 10-K
of Interstate Bakeries Corporation filed on August 23, 2002).10.12.1
    
    First Amendment to the IBC Rabbi Trust Agreement effective August 8,
2003 (incorporated herein by reference to Exhibit 10.19.1 to
Interstate Bakeries Corporations Annual Report on Form 10-K filed on
August 23, 2003).10.13
    
    Form of Award Notice and Non-Qualified Stock Option Agreement pursuant
to the Interstate Bakeries Corporation 1996 Stock Incentive Plan
(incorporated herein by reference to Exhibit 10.9 to the Annual Report
on Form 10-K of Interstate Bakeries Corporation filed on August 23,
2002).10.14
    
    Form of Award Notice and Incentive Stock Option Agreement pursuant to
the Interstate Bakeries Corporation 1996 Stock Incentive Plan
(incorporated herein by reference to Exhibit 10.10 to the Annual
Report on Form 10-K of Interstate Bakeries Corporation filed on August
23, 2002).10.15
    
    Form of Indenture for 6.0% Senior Subordinated Convertible Notes Due
2014 (incorporated herein by reference to Exhibit 10.1 to the Current
Report on Form 8-K of Interstate Bakeries Corporation filed on August
12, 2004).10.16
    
    Form of Purchase Agreement for 6.0% Senior Subordinated Convertible
Notes Due 2014 (incorporated herein by reference to Exhibit 10.2 to
the Current Report on Form 8-K of Interstate Bakeries Corporation
filed on August 12, 2004).10.17
    
    Form of Registration Rights Agreement for 6.0% Senior Subordinated
Convertible Notes Due 2014 (incorporated herein by reference to
Exhibit 10.3 to the Current Report on Form 8-K of Interstate Bakeries
Corporation filed on August 12, 2004).10.18
    
    Letter Agreement, dated as of August 27, 2004, amended and restated as
of September 21, 2004 and further amended and restated on October 14,
2004, by and between Alvarez and Marsal, Inc. and Interstate Bakeries
Corporation, Armour & Main Redevelopment Corporation, Bakers Inn
Quality Baked Goods, LLC, IBC Sales Corporation, IBC Services, LLC,
IBC Trucking LLC, Interstate Brands Corporation, New England Bakery
Distributors, LLC and Mrs. Cubbisons Foods, Inc (incorporated herein
by reference to Exhibit 10.24 to Interstate Bakeries Corporations
Annual Report on Form 10-K for the year ended May 29, 2004, filed
October 6, 2006).
 53




---



##### 



Exhibit No.
    
    Exhibit10.18.1
    
    Letter Agreement, dated as of July 18, 2005, by and between Alvarez
and Marsal, Inc. and Interstate Bakeries Corporation, Armour & Main
Redevelopment Corporation, Bakers Inn Quality Baked Goods, LLC, IBC
Sales Corporation, IBC Services, LLC, IBC Trucking LLC, Interstate
Brands Corporation, New England Bakery Distributors, LLC and Mrs.
Cubbisons Foods, Inc (incorporated herein by reference to Exhibit
10.24.1 to Interstate Bakeries Corporations Annual Report on Form
10-K for the year ended May 29, 2004, filed October 6, 2006).10.19
    
    Revolving Credit Agreement, dated as of September 23, 2004, among
Interstate Bakeries Corporation (Parent Borrower), a debtor and
debtor-in-possession in a case pending under Chapter 11 of the
Bankruptcy Code, and each of the direct and indirect subsidiaries of
the Parent Borrower party to this Agreement (each individually a
Subsidiary Borrower and collectively the Subsidiary Borrowers; and
together with the Parent Borrower, the Borrowers), each of which is
a debtor and debtor-in-possession in a case pending under Chapter 11
of the Bankruptcy Code (the cases of the Borrowers, each a Case and
collectively, the Cases), JPMorgan Chase Bank (JPMCB), and each of
the other commercial banks, finance companies, insurance companies or
other financial institutions or funds from time to time party hereto
(together with JPMCB, the Lenders), J.P. Morgan Securities Inc., as
lead arranger and book runner, JPMorgan Chase Bank, as administrative
agent (in such capacity, the Administrative Agent) for the Lenders,
and JPMorgan Chase Bank, as collateral agent (in such capacity, the
Collateral Agent) for the Lenders (incorporated herein by reference
to Exhibit 10.1 to the Current Report on Form 8-K of Interstate
Bakeries Corporation filed on September 27, 2004).10.19.1
    
    First Amendment, dated as of November 1, 2004, to the Revolving Credit
Agreement dated as of September 23, 2004, among Interstate Bakeries
Corporation (Parent Borrower), a debtor and debtor-in-possession in
a case pending under Chapter 11 of the Bankruptcy Code, and each of
the direct and indirect subsidiaries of the Parent Borrower party to
this Agreement (each individually a Subsidiary Borrower and
collectively the Subsidiary Borrowers; and together with the Parent
Borrower, the Borrowers), each of which is a debtor and
debtor-in-possession in a case pending under Chapter 11 of the
Bankruptcy Code (the cases of the Borrowers, each a Case and
collectively, the Cases), JPMorgan Chase Bank (JPMCB), and each of
the other commercial banks, finance companies, insurance companies or
other financial institutions or funds from time to time party hereto
(together with JPMCB, the Lenders), J.P. Morgan Securities Inc., as
lead arranger and book runner, JPMorgan Chase Bank, as administrative
agent (in such capacity, the Administrative Agent) for the Lenders,
and JPMorgan Chase Bank, as collateral agent (in such capacity, the
Collateral) for the Lenders (incorporated herein by reference to the
Current Report on Form 8-K of Interstate Bakeries Corporation filed on
November 5, 2004).10.19.2
    
    Second Amendment, effective as of January 20, 2005, to the Revolving
Credit Agreement, dated as of September 23, 2004, among Interstate
Bakeries Corporation (Parent Borrower), a debtor and
debtor-in-possession in a case pending under Chapter 11 of the
Bankruptcy Code, and each of the direct and indirect subsidiaries of
the Parent Borrower party to this Agreement (each individually a
Subsidiary Borrower and collectively the Subsidiary Borrowers; and
together with the Parent Borrower, the Borrowers), each of which is
a debtor and debtor-in-possession in a case pending under Chapter 11
of the Bankruptcy Code (the cases of the Borrowers, each a Case and
collectively, the Cases), JPMorgan Chase Bank (JPMCB), and each of
the other commercial banks, finance companies, insurance companies or
other financial institutions or funds from time to time party hereto
(together with JPMCB, the Lenders), J.P. Morgan Securities Inc., as
lead arranger and book runner, JPMorgan Chase Bank, as administrative
agent (in such capacity, the Administrative Agent) for the Lenders,
and JPMorgan Chase Bank, as collateral agent (in such capacity, the
Collateral) for the Lenders (incorporated herein by reference to the
Current Report on Form 8-K of Interstate Bakeries Corporation filed on
February 1, 2005).10.19.3
    
    Third Amendment and Waiver, dated as of May 26, 2005, 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
 54




---



##### 



Exhibit No.
    
    ExhibitBorrower (each individually a Subsidiary
Borrower and collectively the Subsidiary Borrowers; and together
with the Parent Borrower, the Borrowers), 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
each of the other commercial banks, finance companies, insurance
companies or other financial institutions or funds from time to time
party to the 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 (the
Administrative Agent) for the Lenders, and JPMorgan Chase Bank,
N.A., a national banking association (formerly known as JPMorgan Chase
Bank), as collateral agent (the Collateral Agent) for the Lenders
(incorporated herein by reference to the Current Report on Form 8-K of
Interstate Bakeries Corporation filed on May 27, 2005).10.19.4
    
    Fourth Amendment and Waiver, dated as of November 30, 2005, 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 individually a
Subsidiary Borrower and collectively the Subsidiary Borrowers; and
together with the Parent Borrower, the Borrowers), 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
each of the other commercial banks, finance companies, insurance
companies or other financial institutions or funds from time to time
party to the 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 (the
Administrative Agent) for the Lenders, and JPMorgan Chase Bank,
N.A., a national banking association (formerly known as JPMorgan Chase
Bank), as collateral agent (the Collateral Agent) for the Lenders
(incorporated herein by reference to the Current Report on Form 8-K of
Interstate Bakeries Corporation filed on December 5, 2005).10.19.5
    
    Fifth Amendment, dated as of December 27, 2005, to the Revolving
Credit Agreement, dated as of September 23, 2004, as amended, among
Interstate Bakeries Corporation (Parent Borrower), a Delaware
corporation, 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
each of the other commercial banks, finance companies, insurance
companies or other financial institutions or funds from time to time
party to the 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 herein by reference to the Current Report on
Form 8-K of Interstate Bakeries Corporation filed on December 30,
2005).10.19.6
    
    Sixth Amendment, dated as of March 29, 2006, to the Revolving Credit
Agreement, dated as of September 23, 2004, as amended, among
Interstate Bakeries Corporation (Parent Borrower), a Delaware
corporation, 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 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 herein by reference to
 55




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##### 



Exhibit No.
    
    Exhibitthe Current Report on
Form 8-K of Interstate Bakeries Corporation filed on March 29, 2006).10.19.7
    
    Seventh Amendment, dated as of June 28, 2006, to the Revolving Credit
Agreement, dated as of September 23, 2004, as amended, among
Interstate Bakeries Corporation (Parent Borrower), a Delaware
corporation, 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
each of the other commercial banks, finance companies, insurance
companies or other financial institutions or funds from time to time
party to the 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 herein by reference to the Current Report on
Form 8-K of Interstate Bakeries Corporation filed on June 30, 2006).10.19.8
    
    Eighth Amendment, dated as of August 25, 2006, to the Revolving Credit
Agreement, dated as of September 23, 2004, as amended, among
Interstate Bakeries Corporation (Parent Borrower), a Delaware
corporation, 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
each of the other commercial banks, finance companies, insurance
companies or other financial institutions or funds from time to time
party to the 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 herein by reference to the Current Report on
Form 8-K of Interstate Bakeries Corporation filed on August 30, 2006).10.19.9
    
    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 (Parent Borrower), a Delaware
corporation, 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
each of the other commercial banks, finance companies, insurance
companies or other financial institutions or funds from time to time
party to the 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 herein by reference to the Current Report on
Form 8-K of Interstate Bakeries Corporation filed on February 16,
2007).10.19.10
    
    First Amendment, dated as of October 1, 2007, to the Amended and
Restated Revolving Credit Agreement, dated as of February 16, 2007, 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 Amended and Restated Revolving Credit Agreement (together
with JPMCB, the Lenders), and JPMCB as administrative agent and
collateral agent for the Lenders (incorporated by reference to Exhibit
10.1 to Interstate Bakeries Corporations Form 8-K filed on October 2,
2007).
 56




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##### 



Exhibit No.
    
    Exhibit10.19.11
    
    Second Amendment, dated as of November 29, 2007, to the Amended and
Restated Revolving Credit Agreement, dated as of February 16, 2007, 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 Amended and Restated Revolving Credit Agreement (together
with JPMCB, the Lenders), and JPMCB as administrative agent and
collateral agent for the Lenders (incorporated by reference to Exhibit
10.1 to Interstate Bakeries Corporations Form 8-K filed on December
3, 2007).10.19.12
    
    Third Amendment, dated as of December 19, 2007, to the Amended and
Restated Revolving Credit Agreement, dated as of February 16, 2007, 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 Amended and Restated Revolving Credit Agreement (together
with JPMCB, the Lenders), and JPMCB as administrative agent and
collateral agent for the Lenders (incorporated by reference to Exhibit
10.1 to Interstate Bakeries Corporations Form 8-K filed on December
19, 2007).10.19.13
    
    Fourth Amendment, dated as of December 19, 2007, to the Amended and
Restated Revolving Credit Agreement, dated as of February 16, 2007, 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 Amended and Restated Revolving Credit Agreement (together
with JPMCB, the Lenders), and JPMCB as administrative agent and
collateral agent for the Lenders.*10.20
    
    Offer of Employment dated July 13, 2005 between Interstate Bakeries
Corporation and Mr. Richard C. Seban (incorporated herein by reference
to the Current Report on Form 8-K of Interstate Bakeries Corporation
filed on August 5, 2005).10.21
    
    Interstate Bakeries Corporation Key Employee Retention Plan
(incorporated herein by reference to Exhibit 10.27 to Interstate
Bakeries Corporations Annual Report on Form 10-K for the year ended
May 29, 2004, filed October 6, 2006).10.22
    
    Consulting Agreement dated July 27, 2007 by and among Interstate
Brands Corporation and Interim LLC (incorporated herein by reference
to the Quarterly Report on Form 10-Q for the quarter ended August 25,
2007, filed on October 4, 2007).10.23
    
    Consulting Agreement dated July 27, 2007 by and among Interstate
Brands Corporation and Miller Management Group, Inc. (incorporated
herein by reference to the Quarterly Report on Form 10-Q for the
quarter ended August 25, 2007, filed on October 4, 2007).10.24
    
    Consulting Agreement dated July 27, 2007 by and among Interstate
Brands Corporation and Timpanogos Consulting LLC (incorporated herein
by reference to the Quarterly Report on Form 10-Q for the quarter
ended August 25, 2007, filed on October 4, 2007).10.24.1
    
    Extension of Consulting Agreement dated March 28, 2008 between Interstate Brands Corporation and Timpanogos Consulting LLC.*
 57




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##### 



Exhibit No.
    
    Exhibit31.1
    
    Certification of Craig D. Jung pursuant to Rule 13a-14(a)/15d-14(a)*31.2
    
    Certification of J. Randall Vance 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 J. Randall Vance pursuant to 18 U.S.C. Section 1350*
 
 *
    
    Filed herewith 58




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##### 



SIGNATURES
  INTERSTATE BAKERIES CORPORATIONDated: April 17, 2008
    By:
    /s/ Craig D. JungCraig D. JungChief Executive Officer
(Principal Executive Officer) Dated: April 17, 2008
    By:
    /s/ J. Randall VanceJ. Randall Vance
Chief Financial Officer
(Principal Financial and Accounting Officer) 59