Milling & Baking News - August 15, 2006 - 12

B U S I N E S S

I.B.C. seeks extensions, searching
for permanent chief executive
KANSAS CITY - Interstate Bakeries
Corp. has filed a motion in the U.S. Bankruptcy Court requesting extensions for
both its $200 million debtor-in-possession
(DIP) financing agreement with JPMorgan Chase Bank and its deadline for filing
its reorganization plan. In addition, I.B.C.
said it will begin a search for a permanent
chief executive officer to replace Tony Alvarez II, co-founder and co-c.e.o. of Alvarez & Marsal. Mr. Alvarez, who was hired
in September 2004 to lead the company
through bankruptcy, is expected to stay
on at I.B.C. throughout the search process
and be available after as an adviser.
The company also said it will review
candidates to fill two vacancies on its board
left open following the resignations of
Charles Sullivan and James Elsesser in July
2005 and September 2004, respectively.

With the request for extension, I.B.C.
is looking to extend its DIP facility to
June 2, 2007, from Sept. 22, 2006. Mr. Alvarez said several factors prompted the
request for more time.
"The improvement in financial performance has taken longer to complete principally due to intense competitive pressures
and significantly higher ingredient costs,
particularly flour and sugar, and energy
costs negatively impacting our fiscal 2006
performance," he said. "We believe fiscal 2007 will be a transitional year for the
company during which the operational, financial and marketing initiatives we have
implemented during our restructuring
will begin to impact our results."
As of July 1, 2006, the end of I.B.C.'s first
period in fiscal 2007, the company said it
had $74.5 million of unrestricted cash and

$86.5 million of restricted cash and had not
borrowed under its $200 million DIP. The
company did note that it has issued $105.8
million of letters of credit outstanding.
In a separate motion filed with the
bankruptcy court, I.B.C. requested an extension to its deadlines for filing and seeking acceptance of its reorganization plans.
The company asked the court to extend
the deadline for filing the plan from Sept.
22, 2006, to Jan. 31, 2007, and to extend
the deadline for seeking acceptance of the
plan from Nov. 21, 2006, to April 2, 2007.
I.B.C. said the additional time is needed
to allow the company "to complete the
valuation analysis and explore exit financing alternatives necessary to develop
the plan of reorganization."
Since filing for bankruptcy in September 2004, I.B.C. has restructured 10 profit
centers and closed nine bakeries.
The bankruptcy court should consider
both requested extensions at a hearing
scheduled for Aug. 23, the company said. MBN

'Talladega Nights' seen giving
boost to Wonder bread brand
KANSAS CITY - The prominent placement of Wonder bread in "Talladega Nights:
The Ballad of Ricky Bobby," a new motion
picture, is generating significant benefits for
Interstate Bakeries Corp., a top marketing
executive at the company said last week.
"Part of what the tie-in does is bring more
brand awareness to Wonder and contemporizes the brand, " said Stan Osman, vicepresident of marketing, bread. "It is a good
fit and has worked out well."
The movie, starring Will
Ferrell, has been a hit with
moviegoers. In its opening
Aug. 4-6 weekend, "Talladega Nights" was the top movie
in ticket sales, totaling $47 million. The NASCAR spoof more
than "lapped" the No. 2 film,
"Barnyard," at $16 million.
In "Talladega Nights,"
Mr. Ferrell portrays Ricky
Bobby, a driver whose
race car is sponsored by
Wonder.
In agreeing to the
Wonder product placement (without paying), I.B.C. took a
number of risks. In
addition to uncertainty as to whether the
movie would achieve
box
office
success,
the company was not
allowed to preview the
script in advance.
bakingbusiness.com / world-grain.com

Still, the decision to allow the Wonder
placement in the satire about race car driving made sense, Mr. Osman said.
"NASCAR has become as all-American
as Wonder bread, which is the best selling
brand of white bread in the United States,"
he said. "It's a good match. It isn't the first
time that I.B.C. made a connection with car
racing. Last year we conducted the Hostess
'Race Divas' sponsorship that featured women racing drivers, including Danica Patrick."
Sony Pictures, which produced "Talladega Nights," was looking for an iconic
brand, Mr. Osman said.
"It has been a good partnership," he said.
"We've been told that Will Ferrell is a big fan
of Wonder and wore the uniform and cap in
public and television appearances before the
opening. Obviously, the movie
has done well and reviews
have been generally good."
The movie generated
nearly $4.3 million of
exposure value for
Wonder
during
the film's opening weekend,
a c c o rd i n g
to research
conducted
by
Joyce
Julius & Associates, Inc.,
which specializes in measuring the impact of
sponsorships
and

promotions across all forms of media.
Joyce Julius & Associates said the Wonder bread logo appeared clear and in-focus
for 11 minutes, 32 seconds (11:32), while
the brand also was mentioned on two occasions by the actors.
The exposure value was calculated by comparing the estimated number of people who
saw the film, along with the on-screen time
and mentions to the cost of reaching the same
size audience through traditional advertising.
In connection with the film, I.B.C. is conducting the Ready, Set, Talladega! Sweepstakes.
Prizes include a trip for four to a NASCAR
race in Talladega, Ala., in October; the Wonder
bread uniform jacket and baseball cap used in
the film; a five-year supply of Wonder bread;
and a Wonder bread die-cast car, a miniature
version of the race car in the movie.
Asked whether the film's popularity is
translating into improved sales of Wonder
bread, Mr. Osman said "a direct correlation
cannot be drawn."
"But I'm hopeful," he added. MBN

Kemira raises calcium
propionate, sodium
propionate prices
TIEL, THE NETHERLANDS - Kemira
ChemSolutions BV recently increased
the prices of its calcium propionate and
sodium propionate by 3c per lb.
"These additional increases are necessitated by the continuing escalation
of propionic acid costs, combined with
other energy related production cost increases," Kemira said. MBN

Milling & Baking News, August 15, 2006 / 13

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Milling & Baking News - August 15, 2006

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