Interstate Bakeries Corporation (IBC) announced that Ronald B. Hutchison has been named executive vice president and chief financial officer for IBC effective immediately. He will report directly to CEO James Elsesser and will work closely with Elsesser and other members of senior management to consolidate operations and improve profitability. The chief financial officer position had been open since the retirement of Frank W. Coffey as CFO in May of 2003.
"Ron brings a strong expertise in corporate finance and complex organizations," said Elsesser. "He will be a key participant in our refinancing activities and a major contributor in IBC's efforts to improve our operations, systems and financial performance."
Hutchison joins IBC after one year at Aurora Foods in St. Louis, where he was executive vice president, responsible for overseeing Aurora's restructuring and the negotiation of its merger with Pinnacle Foods. From 2002 to 2003, Hutchison was executive vice president for Kmart Corporation, where he oversaw the company's reorganization. Prior to joining Kmart, Hutchison was chief financial officer of Advantica Restaurant Group Inc., parent company of the Denny's Corporation restaurant chain. Hutchison is a graduate of the University of Akron with a bachelor's degree in accounting and a Certified Public Accountant. Members of IBC's senior management who will report directly to Hutchison include Paul E. Yarick, senior vice president -- Finance and treasurer, and Laura D. Robb, vice president and corporate controller.
Separately, IBC announced that the audit committee of its board of directors had retained the law firm of Skadden, Arps, Slate, Meagher & Flom LLP to investigate the company's manner for setting its workers' compensation reserves and other reserves. As previously announced on June 3, 2004, the company increased its reserve for workers' compensation during fiscal 2004 with a charge to pretax income of approximately $40 million. The company currently expects that all or a portion of this charge relates to quarters of fiscal 2004 prior to the fourth quarter, although the company's review has not been finalized. If the charge is taken in a quarter other than the fourth quarter, the company will be required to restate its financial statements for the appropriate prior quarter(s).
IBC does not expect to release its earnings for the fourth quarter and fiscal 2004 until the audit committee has reviewed the results of the investigation.