Milling & Baking News - January 15, 2008 - 24

Year End Stocks

America, Gatorade, Tropicana and
Latin American beverage businesses; and PepsiCo International, which
will include PepsiCo business in the
United Kingdom, Europe, Asia, the
Middle East and Africa.
Changes at Maple Leaf in 2007 focused principally on the company's
meat business rather than Canada
Bread, a leading baking company in
Canada. In October 2006, the company announced plans to focus its
growth on Canada Bread as well
as its value-added meat and meals
business.
During 2007, the company sold its
animal nutrition business and closed
four animal processing plants while
announcing plans to invest C$12
million in a food innovation center.
While Ralcorp ended 2007 with a
solid 19% gain, the company's shares
close of $60.79 on Dec. 31 was well
beneath the high of $69.59 reached
in May. Shares tumbled after the
company released second-quarter
earnings but then rallied in November when Ralcorp announced an
agreement it had reached to acquire
the Post ready-to-eat cereal business
from Kraft. The move would transform Ralcorp from its traditional
focus on private label to a leading manufacturer and marketer of
branded breakfast cereal.
While seven grain-based foods
companies enjoyed double-digit

share price appreciation in 2007,
nine companies experienced erosion in the double digits. Of the six
companies sustaining the steepest
declines, five have significant baking ties of one kind or another.
The worst share price performance
in 2007, and the worst performance
possible, was that of Interstate Bakeries Corp., Kansas City, essentially
down 100%. After finishing 2006 at
$2.40 per share, I.B.C. closed 2007 at
a value of 1c per share, a decline of
99.6%. The 100% decline followed a
68% drop in 2006 and a 16% gain in
2005, the full years since the company declared bankruptcy. Hopes,
once high, that I.B.C. would emerge
from bankruptcy with value intact
for shareholders diminished in 2006
and evaporated in 2007. The degree
to which I.B.C. will emerge from
bankruptcy intact as an identifiable
business was a question of considerable uncertainty going into 2008.
Diminished investor optimism
about the recovery of another company, Krispy Kreme Doughnuts,
Inc., was reflected in the 72% decline in the Winston-Salem, N.C.based company's shares in 2007.
The 72% decline followed on the
heels of a 95% rally in 2006 and a
54% drop in 2005. The $3.16 closing price was down 96% from the
all-time high price of $54.25 per
share (adjusted for a stock split)

Year-end close for
Grain-Based Foods
Share Index with
change from previous
year, 1996-2007
Year
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996

Close
11657.58
11542.79
9687.18
10852.64
9462.92
9918.02
9662.41
9326.84
6882.79
9557.88
9693.93
7410.62

Point
change
115
1856
-1165
1390
-487
287
336
2444
-2675
-136
2283
1007

Per cent
change
1.0%
19.2%
-10.7%
14.7
-4.9
3
3.6
35.5
-28
-1.4
30.8
15.7

recorded in November 2000.
Earlier in 2007, Daryl Brewster,
then the company's president and
chief executive officer, expressed
disappointment over the company's
operating results. In the most recent quarter, system-wide sales for
Krispy Kreme fell about 3%, while
system-wide average weekly sales
per store decreased about 9% to
$36,400 per store. Company stores
average weekly sales also declined,
falling 0.4% to about $52,900 per

Interstate Bakeries

Krispy Kreme

MGP Ingredients

-100%

-72%

George Weston
-28%

-58%

J&J Snack
-24%

Panera Bread Co.

AIPC
-21%

-36%

Seaboard
-17%

Kraft Foods
-9%

ConAgra

Campbell Soup
-8%

-12%

Tasty Baking
-7%

2%
Lance

Sara Lee

3%
Hain Celestial

-6%

5%
Kellogg

General Mills

6%
J.M. Smucker

-1%

19%
Ralcorp Holdings

Bridgford

20%
Maple Leaf

21%
Pepsi Co.

Corn Products

22%
Grupo Bimbo

Flowers Foods (s)

ADM

Bunge

30%

47%

61%

Grain-Based Foods Share Index companies:
Stock price change in 2007

24 / January 15, 2008

Milling & Baking News

bakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - January 15, 2008

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