Clove
01-21-2011, 02:13 PM
Tastykakes Maker Gets Reprieve
By Matt Moore, AP Business Writer
Manufacturing.Net - January 17, 2011
PHILADELPHIA (AP) -- Tasty Baking Co., the maker of Tastykakes, said Friday it secured some $6.5 million in public and private financing, and reiterated it was examining all options for its future, including the further refinancing of long-term debt, a merger or even a sale.
The Philadelphia-based company, whose products include Kandy Kakes and Krimpets, said the new financing included $2 million from the Philadelphia Industrial Development Corp., a private, not-for-profit founded by the City of Philadelphia and the Greater Philadelphia Chamber of Commerce to promote economic development throughout the city. The state's Department of Community and Economic Development is providing $1 million, and $3.5 million is coming from a group of investors.
Additionally, its banking group, led by Citizens Bank, agreed to defer payments and reductions in credit through June 30. The company is still looking at its next step, which could include a sale or merger or the further refinancing of long-term debt.
Charles P. Pizzi, the company's president and chief executive, said that the new funding will help it manage cash flow and wrestle with its tight liquidity situation as it "continues its evaluation of possible financial and strategic alternatives which, in addition to a possible sale or merger of the Company, include the possibility of refinancing the company's long term debt or raising additional capital."
Regardless of what happens, he said Tasty Baking will "remain focused on operational efficiencies, growing the business and continuing to produce, distribute and sell Tastykake products to our customers and consumers."
The company, whose products have long been a snack fixture in the northeastern U.S., said last week that declining sales and the failure to produce projected savings from a new production facility at Philadelphia's Navy Yard, had lowered projected savings for the fourth quarter of 2010 by $3 million to $10 million.
Tasty Baking, which was founded in 1914, has a second production facility in Oxford, Pa.
Shares of Tasty Baking were down nearly 3.3 percent to close at $3.87 in trading on the Nasdaq.
An uproar ensued, particularly in Philadelphia, where love for the company's products prompted a front-page appeal in the Philadelphia Daily News.
Tasty Baking cited a bankruptcy filing by the owner of the A&P, Super Fresh and Pathmark grocery chains and rising commodity costs as contributing factors to the financial squeeze.
On Wednesday, outgoing Gov. Ed Rendell said the state was ready to offer Tasty Baking a $1 million loan, besides the other financing, the company announced.
"Since our announcement last week, we have heard from countless fans, supporters and friends of the iconic Tastykake brand," Pizzi said. "We could not be more grateful and appreciative of their dedication and encouragement. Today's news is a testament to their passion and loyalty to Tastykake."
http://manufacturing.net/News/2011/01/Food-Beverage-Tastykakes-Maker-Gets-Reprieve/?menuid=38Show your support for this irreplaceable institution:
http://shop.tastykake.com/Products/Krimpet-Computer-Mouse__301100.aspx
By Matt Moore, AP Business Writer
Manufacturing.Net - January 17, 2011
PHILADELPHIA (AP) -- Tasty Baking Co., the maker of Tastykakes, said Friday it secured some $6.5 million in public and private financing, and reiterated it was examining all options for its future, including the further refinancing of long-term debt, a merger or even a sale.
The Philadelphia-based company, whose products include Kandy Kakes and Krimpets, said the new financing included $2 million from the Philadelphia Industrial Development Corp., a private, not-for-profit founded by the City of Philadelphia and the Greater Philadelphia Chamber of Commerce to promote economic development throughout the city. The state's Department of Community and Economic Development is providing $1 million, and $3.5 million is coming from a group of investors.
Additionally, its banking group, led by Citizens Bank, agreed to defer payments and reductions in credit through June 30. The company is still looking at its next step, which could include a sale or merger or the further refinancing of long-term debt.
Charles P. Pizzi, the company's president and chief executive, said that the new funding will help it manage cash flow and wrestle with its tight liquidity situation as it "continues its evaluation of possible financial and strategic alternatives which, in addition to a possible sale or merger of the Company, include the possibility of refinancing the company's long term debt or raising additional capital."
Regardless of what happens, he said Tasty Baking will "remain focused on operational efficiencies, growing the business and continuing to produce, distribute and sell Tastykake products to our customers and consumers."
The company, whose products have long been a snack fixture in the northeastern U.S., said last week that declining sales and the failure to produce projected savings from a new production facility at Philadelphia's Navy Yard, had lowered projected savings for the fourth quarter of 2010 by $3 million to $10 million.
Tasty Baking, which was founded in 1914, has a second production facility in Oxford, Pa.
Shares of Tasty Baking were down nearly 3.3 percent to close at $3.87 in trading on the Nasdaq.
An uproar ensued, particularly in Philadelphia, where love for the company's products prompted a front-page appeal in the Philadelphia Daily News.
Tasty Baking cited a bankruptcy filing by the owner of the A&P, Super Fresh and Pathmark grocery chains and rising commodity costs as contributing factors to the financial squeeze.
On Wednesday, outgoing Gov. Ed Rendell said the state was ready to offer Tasty Baking a $1 million loan, besides the other financing, the company announced.
"Since our announcement last week, we have heard from countless fans, supporters and friends of the iconic Tastykake brand," Pizzi said. "We could not be more grateful and appreciative of their dedication and encouragement. Today's news is a testament to their passion and loyalty to Tastykake."
http://manufacturing.net/News/2011/01/Food-Beverage-Tastykakes-Maker-Gets-Reprieve/?menuid=38Show your support for this irreplaceable institution:
http://shop.tastykake.com/Products/Krimpet-Computer-Mouse__301100.aspx