Tastykake Finances Not So Sweet
PHILADELPHIA (CBS/AP) -- A long-time Philadelphia company announced Wednesday that unexpected production problems at its new South Philadelphia bakery have resulted in financial woes.
Charlie P. Pizzi, president and CEO of Tasty Baking Company, says they experienced a shaky fourth quarter last year.
Pizzi blames financial problems on unexpected production difficulties at its new bakery facility in South Philadelphia's Naval Business Center. He cited other factors such as the impact of the bankruptcy filing by A&P, and the sharp rise in commodity costs.
Tasty Baking Company is said to be discussing various alternatives to solve its problems with their financial lenders group led by Citizens Bank, the possibility of a potential merger, or the complete sale of the baking company. Tasty has also retained Janney Montgomery Scott to evaluate various possible financial and strategic options including refinancing long term debt due in September 2012.
During the process, the company will continue to operate its two modern bakeries and produce, distribute and sell Tastykake products to its customers and consumers. Pizzi concluded, "While this has been a challenging period for us operationally, we remain focused on growing the business. To that end we continue to partner with new grocery and convenience store customers within our core markets, increase penetration with key customers, and launch new products into the marketplace. Finally, despite the challenges we have faced, we have continued to outpace the category and grow our overall market share."
One person who is still optimistic about the future of Tastykake is Mayor Nutter, who addressed the situation KYW Newsradio's "Ask the Mayor."
Mayor Nutter says he was fully briefed on the financial woes of Tastykake by the Pizzi, and Nutter is optimistic that the firm will get through this.
"I think they have certainly plans in place. They're still selling products. There are no issues in terms of folks getting their Krimpets and Tastykakes," said Nutter.
Nutter said Pizzi did not raise the issue of the need for any sort of tax relief from the city, though their value to the city, he stressed, is huge.
"Tastykake is an institution in Philadelphia. It is a part of the fabric of the city," said Nutter.
Tasty Baking Company, founded in 1914 and headquartered in Philadelphia, Pennsylvania, is one of the country's leading bakers of snack cakes, pies, cookies, and donuts with manufacturing facilities in Philadelphia and Oxford, Pennsylvania. Tasty Baking Company offers more than 100 products under the Tastykake brand name.
Reported by Al Novak, KYW Newsradio, Mike Dunn, KYW Newsradio City Hall Bureau Chief; Elizabeth Hur, CBS 3
(TM and © Copyright 2010 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2010 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.)
