Interstate Bakeries Corp.'s massive consolidation efforts have done little to date to stop the company's hemorrhaging net losses. For the four-week period ended Nov. 12, the Kansas City, Mo.-based company recorded a net loss of $32.5 million on sales of $231 million.
IBC's continued losses come amid consolidation efforts that significantly have changed the company's makeup. The latest round of consolidation spared bakeries, but affected sales and delivery routes in the company's North Central, South Central and Southeast profit centers. In these regions, the company standardized distribution and consolidated delivery routes and bakery outlets through the individual profit centers, which affected about 450 employees.
The company estimates charges related to these consolidation efforts to be about $3 million, including about $1 million in severance charges and about $2 million in other charges. The company also plans to spend about $3 million in capital expenditures and accrued expenses to implement the consolidation.
IBC has completed nine of 10 profit center reviews, with the Upper Midwest profit center review expected to be completed in the first quarter of 2006. So far, the company has closed seven bakeries and consolidated countless routes.