Milling & Baking News - September 7, 2004 - (Page 1)

Theinewsweeklyiofigrain-basedifoods / With financial picture darkening further, I.B.C. again delays filing KANSAS CITY - Raising further doubt about its future and introducing the specter of a possible bankruptcy filing, Interstate Bakeries Corp. has delayed for a second time filing its fiscal 2004 10-K annual report with the Securities and Exchange Commission and revealed it has retained the services of a prominent turnaround consulting firm. The company previously had obtained an extension until Aug. 27 for filing its 10-K for the fiscal year ended May 29. It sought the earlier extension in connection with an internal audit of workmen's compensation charges (see Milling & Baking News of Aug. 17, Page 1). The latest delay does not reflect problems with fiscal 2004 results. On a preliminary basis, I.B.C. has estimated it lost $25.8 LATE million its 2004 fiscal year. Instead, the delay appears tied to problems in the current fiscal year. The company said deficiencies have come to light in initial data entry and training in financial reporting systems implemented June 1. These deficiencies have created uncertainty regarding fiscal first-quarter results. In particular, I.B.C. said it has become difficult for the company "to analyze the impact of negative sales trends" during the quarter. Because of this uncertainty, I.B.C. said it does not know whether it remains in compliance with fiscal 2005 covenants in its senior secured credit facility agreement. If the company were not in compliance, I.B.C. said it may have to publish in its fiscal 2004 Continued on Page 14 Committee seeks to cut grains servings target in guidelines WASHINGTON - Recommended intake of grains products would be lowered by as many as two servings per day in proposals just published by the U.S. Department of Agriculture and the Department of Health and Human Services. The agencies are seeking written and oral comments following the Aug. 27 release of the final Report of the Dietary Guidelines Advisory Committee in connection with the Dietary Guidelines for Americans to be published in January. In the proposed recommendations, daily grains intake are cut two servings per day for individuals on a 2,000-, 2,200- or 2,400calorie diet, to six, seven or eight servings per day, respectively. Food labels are based Continued on Page 17 CEREAL industry perspective Story on Page 21 inside SEPTEMBER 7, 2004 NEWS WASHINGTON - Shipments of commercial baked foods in 2002 were valued at $21,381,217,000, up 15% from 1997, according to the 2002 Economic Census issued Sept. 1 by the Department of Commerce. Bread shipments in 2002 totaled $7,935,228,000, up $759 million from 1997. Census sub-categories accounting for much of the bread increase were white pan bread, up $230 million, or a 6% increase from 1997; whole wheat bread, up $67 million, or up 5%, and other variety bread, up $280 million, or up 32%. Shipments of soft cakes in 2002 were $2,375,958,000, up 5% from 1997. In a break from the Continued on Page 10 Baking shipment value up 15% NAMA supports pyramid as graphic, would like to see concise message WASHINGTON - In comments submitted Aug. 26 to the U.S. Department of Agriculture, the North American Millers' Association said the Food Guide Pyramid represents a healthy eating plan and should remain a powerful tool in representing the Dietary Guidelines graphically to the public and to identify Dietary Guidelines materials. In a letter from the association's president, Elizabeth A. (Betsy) Faga, NAMA said that not only should the pyramid remain, but the U.S.D.A. should strive to deliver clearly and concisely the key components of a healthy lifestyle - calorie Continued on Page 29 THIS WEEK Sosland and others promoted at MBN 11 Ingredient General Mills closing Vallejo mill 15 U.S. appeal against Wheat Board fails 18 Week 31

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Milling & Baking News - September 7, 2004