Twinkies' maker files bankruptcy
Interstate Bakeries, maker of Wonder Bread and Twinkies, filed for bankruptcy court protection early Wednesday.
The company, which operates 57 bakeries throughout the United States and employs more than 33,000 people, listed assets of $1.6 billion and liabilities of $1.3 billion. It filed under Chapter 11 of the U.S. Bankruptcy Code, and said it intends to continue normal operations.
The company has been hit by both accounting problems and a drop in sales it attributed to the popularity of low-carb diets. Last month, it missed an extended deadline for filing a 10K report with the Securities and Exchange Commission detailing its fiscal year financial results for the period ended May 29.
It said in a statement the filing was brought on by liquidity issues, resulting from declining sales, a high fixed-cost structure, excess industry capacity, rising employee healthcare and pension costs and higher costs for ingredients and energy.
Damn Atkins diet! Seriously, many companies are running into this very same situation. If you are not flexible in down-times and prepared for slowing trends, then you will see fiscal fallout. A radio blurb on this story sited older physical plants costing more to operate and an antiquated distribution network. On of the key tenants that I have learned in corporate life is that no matter how much it sucks, change happens. You have to improvise, adapt, and overcome.
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