KANSAS CITY, Mo. – The stock price of Interstate Bakeries Corp. (IBC) dropped more than a third in value Monday after the nation's largest wholesale baker said it had missed another deadline for submitting its annual report.
The maker of Wonder bread (search) and Hostess snack cakes also said it has retained the turnaround firm of Alvarez & Marsal to help, and it is talking to its lenders.
Its shares were trading at $5.18, down $2.72, or 34.4 percent, on the New York Stock Exchange (search). Trading was heavy with 3.9 million shares changing hands, compared to the normal daily trading of 456,000 shares.
The Kansas City-based food company blamed the delay on a number of factors, including problems in its new financial reporting system. It also disclosed that its independent auditors might issue an opinion questioning its ability to continue its current level of operations.
Interstate Bakeries requested an extension for the year that ended in May because of a series of investigations into its reserve fund for workers' compensation claims. The company was supposed to have handed in the report on Aug. 27.
But the company said the report is still not finished because of problems with the financial system it started using in June, uncertainty over financial results for the current quarter, questions over whether the company will be able to comply with its loan agreements this year and the possibility that the auditors might include a paragraph in their report on its fiscal 2004 financial statements "to the effect that there may be substantial doubt about the company's ability to continue as a going concern."
Interstate State added that its loans require an annual report by Sept. 26 or the company may lose the money it needs for operations.