Interstate Bakeries names new CEO, reports $12.9 million loss

Interstate Bakeries names new CEO, reports $12.9 million loss

Interstate Bakeries names new CEO, reports $12.9 million loss

 

Interstate Bakeries Corp., the bankrupt maker of Twinkies and Wonder bread, on Tuesday named Craig D. Jung as chief executive officer, replacing interim CEO Tony Alvarez.

 

The appointment is subject to U.S. Bankruptcy Court approval, with a hearing scheduled Feb. 16. The court will also be asked to approve Jung's appointment to the company's board of directors.

 

Also on Feb. 16, the company will also ask the court to extend the maturity of its debtor-in-possession financing facility to February 2008. The current expiration date is June 2, 2007.

 

Jung, 53, previously served as CEO of Panamerican Beverages, formerly the world's third-largest Coca-Cola bottler. He also spent 11 years at PepsiCo and served as founding chief operating officer of Pepsi Bottling Group.

 

Alvarez has served as Interstate's interim CEO since the company filed Chapter 11 protection in September 2004. He is the co-founder and co-chief executive of Alvarez & Marsal, a corporate advisory and turnaround management services firm brought in by Interstate Bakeries.

 

The company said Jung's proposed three-year contract includes an annual base salary of $900,000, a $1.2 million signing bonus and, beginning in the 2009 fiscal year, eligibility for bonuses tied to fulfillment of the company's performance goals.

 

Jung's appointment came the same day that Interstate Bakeries said its monthly losses increased 80 percent in December on lower sales and slightly lower costs.

 

For the four weeks ending Dec. 16, the Kansas City-based company said it lost $12.9 million on revenues of $213.1 million.

 

In November, the company reported losing $7.15 million on sales of $222.3 million. A year ago, in the same four-week period ending in December, Interstate lost $9.7 million on $223.8 million in revenue.

 

Costs of goods sold and other operating expenses during December decreased 1.7 percent from the previous month to $213.8 million.

 

The U.S. Bankruptcy Court has required monthly reports from Interstate Bakeries since the company filed for Chapter 11.

 

Interstate's shares, which trade on the over-the-counter market, gained 15 cents, or 6.7 percent, to close at $2.40 before the report was filed. The stock has traded in a 52-week range of $1.92 to $9.95.

 

Interstate Bakeries said it has not borrowed under its $200 million debtor-in-possession financing facility, but has used it to issue letters of credit totaling $109 million, mostly to support its insurance programs.