SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the thirteen weeks ended March 29, 2003
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-5084
TASTY BAKING COMPANY
(Exact name of company as specified in its charter)
Pennsylvania 23-1145880
--------------------------------------------------------------------------------
(State of Incorporation) (IRS Employer Identification Number)
2801 Hunting Park Avenue, Philadelphia, Pennsylvania 19129
--------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(215) 221-8500
--------------------------------------------------------------------------------
(Company's Telephone Number, including area code)
Indicate by check mark whether the company (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes X No
---- ----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, par value $.50 8,097,112
--------------------------------------------------------------------------------
(Title of Class) (No. of Shares Outstanding
as of May 2, 2003)
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TASTY BAKING COMPANY AND SUBSIDIARIES
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
March 29, 2003 and December 28, 2002...............................3
Consolidated Statements of Operations
Thirteen weeks ended March 29, 2003 and March 30, 2002.............4
Consolidated Statements of Cash Flows
Thirteen weeks ended March 29, 2003 and March 30, 2002.............5
Notes to Consolidated Financial Statements.......................6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..............................8-9
Item 3. Quantitative and Qualitative Disclosure
About Market Risk ................................................10
Item 4. Disclosure of Controls and Procedures.............................10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K..................................11
Signature ..................................................................12
Certification 302 .......................................................13-15
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TASTY BAKING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
------------------------------------------------------------------------------------------
March 29, 2003 December 28, 2002
------------------------------------------------------------------------------------------
Current assets:
Cash $ 56,000 $ 282,000
Receivables, less allowance of $3,460,000
and $3,606,000, respectively 23,599,000 20,881,000
Inventories 6,282,000 6,777,000
Deferred income taxes 5,214,000 5,214,000
Prepayments and other 2,425,000 2,941,000
---------------------------------------
Total current assets 37,576,000 36,095,000
---------------------------------------
Property, plant and equipment:
Land 1,098,000 1,098,000
Buildings and improvements 37,889,000 37,832,000
Machinery and equipment 149,363,000 148,990,000
---------------------------------------
188,350,000 187,920,000
Less accumulated depreciation 131,106,000 129,529,000
---------------------------------------
57,244,000 58,391,000
---------------------------------------
Long-term receivables from owner/operators 9,971,000 10,095,000
Deferred income taxes 8,230,000 8,230,000
Spare parts inventory 3,769,000 3,699,000
Other 50,000 50,000
---------------------------------------
22,020,000 22,074,000
---------------------------------------
Total assets $116,840,000 $116,560,000
=======================================
Current liabilities:
Current obligations under capital leases $ 173,000 $ 176,000
Notes payable, banks 3,200,000 4,500,000
Accounts payable 8,965,000 6,074,000
Accrued payroll and employee benefits 5,118,000 5,159,000
Reserve for restructures 1,190,000 2,417,000
Other 674,000 981,000
---------------------------------------
Total current liabilities 19,320,000 19,307,000
Long-term debt 9,000,000 9,000,000
Long-term obligations under capital leases,
less current portion 3,431,000 3,486,000
Reserve for restructures-less current portion 3,568,000 3,568,000
Accrued pensions and other liabilities 15,993,000 15,923,000
Postretirement benefits other than pensions 17,872,000 17,751,000
---------------------------------------
Total liabilities 69,184,000 69,035,000
---------------------------------------
Shareholders' equity:
Common stock 4,558,000 4,558,000
Capital in excess of par value of stock 29,400,000 29,433,000
Retained earnings 26,700,000 26,622,000
---------------------------------------
60,658,000 60,613,000
Less:
Treasury stock, at cost 12,540,000 12,539,000
Management Stock Purchase Plan
receivables and deferrals 462,000 549,000
---------------------------------------
47,656,000 47,525,000
---------------------------------------
Total liabilities and shareholders' equity $116,840,000 $116,560,000
=======================================
See accompanying notes to consolidated financial statements.
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TASTY BAKING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
----------------------------------------------------------------------------------------
For the Thirteen Weeks Ended
March 29, 2003 March 30, 2002 (a)
----------------------------------------------------------------------------------------
Gross Sales $ 64,372,000 $ 64,039,000
Less discounts and allowances (23,388,000) (23,380,000)
--------------------------------------------
Net Sales 40,984,000 40,659,000
--------------------------------------------
Costs and expenses:
Cost of sales 27,984,000 26,029,000
Depreciation 1,739,000 1,735,000
Selling, general and administrative 10,713,000 10,829,000
Restructure charge reversal (220,000) --
Interest expense 201,000 368,000
Provision for doubtful accounts 77,000 80,000
Other income, net (252,000) (280,000)
--------------------------------------------
40,242,000 38,761,000
--------------------------------------------
Income before provision for
income taxes 742,000 1,898,000
Provision for income taxes 260,000 693,000
--------------------------------------------
Net income $ 482,000 $ 1,205,000
============================================
Average common shares outstanding:
Basic 8,099,000 8,050,000
Diluted 8,099,000 8,188,000
Per share of common stock:
Net income:
Basic and Diluted $ 0.06 $ 0.15
============ ============
Cash dividend $ 0.05 $ 0.12
============ ============
(a) An amount of $74,000 has been reclassified to reflect a correction of
certain expenses recorded in cost of sales and selling, general and
administrative expense.
See accompanying notes to consolidated financial statements.
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TASTY BAKING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
--------------------------------------------------------------------------------------------------------------
For the Thirteen Weeks Ended
March 29, 2003 March 30, 2002
--------------------------------------------------------------------------------------------------------------
Cash flows from (used for) operating activities
Net income $ 482,000 $ 1,205,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,739,000 1,735,000
Restructure charge reversal (220,000) --
Provision for doubtful accounts 77,000 80,000
Pension expense 370,000 278,000
Other (193,000) (162,000)
Changes in assets and liabilities:
Increase in receivables (2,795,000) (1,203,000)
Decrease in inventories 495,000 964,000
Decrease (increase) in prepayments and other 517,000 (605,000)
Increase (decrease) in accrued payroll, accrued income
taxes, accounts payable and other current liabilities 1,536,000 (1,349,000)
--------------------------------------------
Net cash from operating activities 2,008,000 943,000
--------------------------------------------
Cash flows from (used for) investing activities
Purchase of property, plant and equipment (593,000) (1,422,000)
Proceeds from owner/operators' loan repayments 858,000 861,000
Loans to owner/operators (733,000) (857,000)
Other (3,000) 63,000
--------------------------------------------
Net cash used for investing activities (471,000) (1,355,000)
--------------------------------------------
Cash flows from (used for) financing activities
Dividends paid (405,000) (966,000)
Payment of long-term debt (58,000) (59,000)
Net increase(decrease) in short-term debt (1,300,000) 1,200,000
--------------------------------------------
Net cash from(used for) financing activities (1,763,000) 175,000
--------------------------------------------
Net decrease in cash (226,000) (237,000)
Cash, beginning of year 282,000 367,000
--------------------------------------------
Cash, end of period $ 56,000 $ 130,000
============================================
Supplemental Cash Flow Information:
Cash paid during the period for:
Interest $ 157,000 $ 215,000
============================================
Income taxes $ 41,000 $ 150,000
============================================
See accompanying notes to consolidated financial statements.
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TASTY BAKING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies
--------------------------------
Interim Financial Information
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly
the financial position of the company as of March 29, 2003 and December
28, 2002, the results of its operations for the thirteen weeks ended
March 29, 2003 and March 30, 2002 and cash flows for the thirteen weeks
ended March 29, 2003 and March 30, 2002. These unaudited consolidated
financial statements should be read in conjunction with the consolidated
financial statements and footnotes thereto in the company's 2002 Annual
Report to Shareholders. In addition, the results of operations for the
thirteen weeks ended March 29, 2003 are not necessarily indicative of the
results to be expected for the full year.
Net Income Per Common Share
Net income per common share is presented as basic and diluted earnings
per share. Net income per common share - Basic is based on the weighted
average number of common shares outstanding during the year. Net income
per common share - Diluted is based on the weighted average number of
common shares and dilutive potential common shares outstanding during the
year. Dilution is the result of outstanding stock options.
Stock-Based Compensation
The company measures stock-based compensation in accordance with APB
Opinion No. 25, "Accounting for Stock Issued to Employees" and has
calculated the pro-forma impact of the fair-value method in accordance
with Statement of Financial Accounting Standard No. 123, "Accounting for
Stock-Based Compensation." The calculated difference between the reported
and pro-forma net income amounts is not material for the first quarter of
2003 and the first quarter of 2002.
Pension Plan
The company's funding policy for its pension plan is to contribute
amounts deductible for federal income tax purposes plus such additional
amounts, if any, as the company's actuarial consultants advise to be
appropriate. The company accrues normal periodic pension expense or
income during the year based upon certain assumptions and estimates from
its actuarial consultants in accordance with Statement of Financial
Accounting Standard No. 87. These estimates and assumptions include
discount rate, rate of return on plan assets, compensation increases,
mortality and employee turnover. In addition, the rate of return on plan
assets is directly related to changes in the equity and credit markets,
which can be very volatile. The use of the above estimates and
assumptions, market volatility and the company's election to immediately
recognize all gains and losses in excess of its pension corridor in the
current year may cause the company to experience significant changes in
its pension expense or income from year to year. Expenses or income that
fall outside the corridor are recognized only in the fourth quarter.
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2. Restructure Charges
--------------------
In the first quarter of 2003, the company recognized a net restructure
charge reversal of $220,000. This reversal resulted from favorable
settlements of certain thrift store lease contracts. These settlements
relate to the restructure charges taken during 2002 and 2001.
During the second quarter of 2002, the company closed six thrift stores
and eliminated certain manufacturing and administrative positions. There
were 67 employees terminated as a result of this restructure, of which 42
were temporary employees, 13 were thrift store employees and 12 were
corporate and administrative employees. Costs related to these events
were included in a restructure charge of $1,405,000.
During the fourth quarter of 2002, the company incurred a $4,936,000
restructure charge related to the closing of the remaining twelve thrift
stores and the specific arrangements made with senior executives who
departed the company in the fourth quarter of 2002. There were 29
employees terminated as a result of this restructure, of which 25 were
thrift store employees and 4 were corporate executives.
During the fourth quarter of 2001, the company closed its Dutch Mill
plant in Wyckoff, New Jersey. In addition, the company closed two thrift
stores. Costs related to these events were included in a restructure
charge of $1,728,000.
RESTRUCTURE RESERVE ACTIVITY
Balance Reclass Reversal Balance
12/28/02 Payments of PP&E of Reserve 3/29/03
-------------------------------------------------------------------------------------------
Lease obligations $2,078,000 $ 165,000 $ - $ 220,000 $1,693,000
Severance 3,403,000 475,000 - - 2,928,000
Fixed Asset 326,000 - 326,000 - -
Other 178,000 41,000 - - 137,000
Total $5,985,000 $ 681,000 $ 326,000 $ 220,000 $4,758,000
The balance of the severance charges is expected to be paid as of 2004
and the balance of the lease obligations and other charges is expected to
be paid as of 2006.
3. Inventories
-----------
Inventories are classified as follows:
March 29, 2003 December 28,2002
-------------------------------------------------------------
Finished Goods $ 2,554,000 $ 2,731,000
Work in progress 866,000 862,000
Raw materials and supplies 2,862,000 3,184,000
------------------------------------------------------------
$ 6,282,000 $ 6,777,000
============================================================
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TASTY BAKING COMPANY AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
------------------------------------------------------------------------
Results of Operations
---------------------
Net income for the first quarter of 2003 was $482,000 or $.06 per diluted share.
Net income for the first quarter of 2002 was $1,205,000 or $.15 per diluted
share. Net income for 2003 included a $220,000 pre-tax restructure charge
reversal due to the favorable settlement of certain thrift store lease
contracts.
Gross sales increased by .5% in the first quarter of 2003 to $64,372,000 from
$64,039,000 in the comparable quarter of 2002. Gross sales in the core route
business increased 3% versus the same period last year. This favorable
performance is primarily due to increased focus and investment in the core route
geography. Non-route sales decreased 6% in the first quarter versus the first
quarter of 2002 primarily due to a decline within the company's vending sales
channel and the company's decision to discontinue sales to certain west coast
accounts that were determined to be unprofitable. The decline in vending sales
resulted primarily from reduced sales within the entire category. All pending
orders for the west coast accounts will be completed within the second quarter
of 2003. The company is examining margins on all lines of business and is
focused on improving profitability.
In the first quarter of 2003, net sales increased by .8% to $40,984,000 from
$40,659,000 in the first quarter of 2002. This increase resulted primarily from
the increase in gross sales. Discounts and allowances increased by only $8,000
to $23,388,000 in the current quarter versus $23,380,000 for the same period
last year due to the company's efforts to invest its promotion expenditures more
effectively.
Cost of sales increased 8% during the first quarter of 2003 over the prior
year's quarter. As a percentage of gross sales, cost of sales increased to 43.5%
in the current quarter from 40.6% in the same quarter last year. This increase
is due to a 9% increase in case volume sold that did not correspondingly
increase gross sales due to wholesale price reductions in the current quarter
relative to the prior year's quarter.
Selling, general and administrative expenses for the first quarter of 2003
decreased by $116,000 or 1.0% compared to the first quarter of 2002. The
decrease was primarily due to the savings recognized by the fourth quarter
restructure of the company thrift stores and the departure of certain
executives. The savings was partially offset by reinvestment in personnel to
fill key positions in the company as well as renewed investment in
infrastructure and sales incentives for the core route business.
Interest expense decreased 45% compared to the same quarter in 2002 primarily
due to a $4 million reduction in debt.
The effective tax rate was 35.0% for the quarter ended March 29, 2003 and 36.5%
for the quarter ended March 30, 2002, which compares to a federal statutory rate
of 34%. The difference between the effective rates and the statutory rate was
the effect of state income taxes.
8 of 15
Financial Condition
-------------------
The company has consistently demonstrated the ability to generate sufficient
cash flow from operations. Bank borrowings, under the company's credit facility,
are used to supplement cash flow from operations during periods of cyclical
shortages.
For the thirteen weeks ended March 29, 2003, net cash from operating activities
increased by $1,065,000 to $2,008,000 from $943,000 for the same period in 2002.
The decrease in net income for the current quarter relative to the same quarter
last year was positively offset by a much smaller net decrease in assets and
liabilities. This net decrease in assets and liabilities was driven by an
increase in accounts payable that was partially offset by an increase in
accounts receivable, and payments made against the reserve for restructures
compared to the same quarter in 2002.
Net cash used for investing activities for the thirteen weeks ended March 29,
2003 decreased by $884,000 relative to the same period in 2002 principally due
to lower capital expenditures. In addition, the excess of proceeds from
owner/operator loan payments over new loans granted in the current quarter was
greater than the same quarter last year.
Net cash used for financing activities for the thirteen weeks ended March 29,
2003 increased by $1,938,000 relative to the same thirteen weeks in 2002, due to
a decrease in short-term debt compared to an increase in the same quarter last
year, partially offset by a reduction of dividends paid in the current quarter
compared to last year. The company reduced its dividend to $.05 per share in the
first quarter of 2003. The dividend had been $.12 per share since 1997.
For the remainder of 2003, the company anticipates that cash flow from
operations, along with the continued availability of credit under the credit
facility, will provide sufficient cash to meet operating and financing
requirements.
Forward-Looking Statements
--------------------------
Certain matters discussed in this Report, including those under the heading
"Management's Analysis," contain "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, and are subject to the
safe harbor created by that Act. These forward-looking statements include
comments about legal proceedings, competition within the baking industry,
availability and pricing of raw materials and capital, improvements in
efficiency expected from plant modernization programs, sales growth by
distribution through existing and other channels of distribution, the
Registrant's business strategies and other statements contained herein that are
not historical facts. Because such forward-looking statements involve risks and
uncertainties, there are important factors that could cause actual results to
differ materially from those expressed or implied by such forward-looking
statements which include changes in general economic or business conditions, the
availability of capital upon terms acceptable to the Registrant, the
availability and prices of raw materials, the level of demand for the
Registrant's products, the outcome of legal proceedings to which the Registrant
is or may become a party, the actions of competitors within the packaged food
industry, changes in consumer tastes or eating habits, the success of plant
modernization and business strategies implemented by the Registrant to meet
future challenges, and the ability to develop and market in a timely and
efficient manner new products which are accepted by consumers. The reader should
review "Management's Discussion and Analysis" in the company's annual report of
Form 10-K for the year ended December 28, 2002 for a more complete discussion of
other factors which may affect the company's financial position.
9 of 15
Item 3. Quantitative and Qualitative Disclosure About Market Risk
---------------------------------------------------------
The company has certain floating rate debt notes. Under current market
conditions, the company believes that changes in interest rates would not have a
material impact on the financial statements of the company. The company also has
notes receivable from owner operators with rates that adjust every three years,
and, therefore, would partially offset the fluctuations in the company's
interest rates on its notes payable. The company also has the right to sell
these notes receivable, and could use these proceeds to liquidate a
corresponding amount of the notes payable.
Item 4. Disclosure of Controls and Procedures
-------------------------------------
The company maintains a system of disclosure controls and procedures designed to
provide reasonable assurance as to the reliability of its consolidated financial
statements and other disclosures included in this report. The company
established a disclosure controls committee, which consists of certain members
of management. During the quarter, the company hired a new Chief Marketing
Officer, a new Chief Financial Officer and a new Vice President of Human
Resources, all of whom actively participated in the evaluation of the disclosure
controls and procedures. Within 90 days prior to the date of filing of this
report, the company carried out an evaluation, under the supervision and with
the participation of management, including the Chief Executive Officer, Chief
Financial Officer and Chief Accounting Officer, of the design and operation of
the company's disclosure controls and procedures. Based on this evaluation, the
company's Chief Executive Officer, Chief Financial Officer and Chief Accounting
Officer concluded that the company's disclosure controls and procedures are
effective for gathering, analyzing and disclosing the information the company is
required to disclose in the reports it files pursuant to the Securities and
Exchange Act of 1934, within the time periods specified in the SEC's rules and
forms. There have been no significant changes in the company's internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of this evaluation.
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TASTY BAKING COMPANY AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
Exhibit 10.1 - Amended and Restated Employment Agreement dated as
of December 28, 2002 between the company and John M. Pettine.
(Management compensation agreement)
Exhibit 99.1 - Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
(b) Reports on Form 8-K
The company filed the following reports on Form 8-K during the
thirteen weeks ended March 29, 2003:
On December 30, 2002, the company furnished a report on Form 8-K
under Item 5, Other Events and Required FD Disclosure, attaching a
press release announcing the retirement of its Chairman of the
Board, the departure of certain senior executives, the closing of
its remaining thrift stores and anticipated restructure charges
for the fourth quarter 2002.
On February 12, 2003, the company furnished a report on Form 8-K
under Item 5, Other Events and Required FD Disclosure, attaching a
press release announcing its fourth quarter and fiscal year 2002
financial results.
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TASTY BAKING COMPANY AND SUBSIDIARIES
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TASTY BAKING COMPANY
----------------------------------
(Company)
/S/ David S. Marberger
------------------------ --------------------------------
(Date) DAVID S. MARBERGER
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(Principal Financial Officer)
/S/ Eugene P. Malinowski
------------------------ --------------------------------
(Date) EUGENE P. MALINOWSKI
DIRECTOR - FINANCE AND
CHIEF ACCOUNTING OFFICER
(Principal Accounting Officer)
12 of 15
CERTIFICATION 302
I, David S. Marberger, Senior Vice President and Chief Financial Officer
(Principal Financial Officer) of Tasty Baking Company, certify that:
(1) I have reviewed this quarterly report on Form 10-Q of Tasty Baking Company;
(2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
(4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
(6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: ______________
/S/ David S. Marberger
-------------------------
David S. Marberger
Senior Vice President and
Chief Financial Officer
13 of 15
CERTIFICATION 302
I, Charles P. Pizzi, President and Chief Executive Officer of Tasty Baking
Company, certify that:
(1) I have reviewed this quarterly report on Form 10-Q of Tasty Baking Company;
(2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
(4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
(6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: ______________
/S/ Charles P. Pizzi
----------------------------
Charles P. Pizzi
President and Chief Executive Officer
14 of 15
CERTIFICATION 302
I, Eugene P. Malinowski, Director of Finance and Chief Accounting Officer
(Principal Accounting Officer) of Tasty Baking Company, certify that:
(1) I have reviewed this quarterly report on Form 10-Q of Tasty Baking Company;
(2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
(4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
(6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: ______________
/S/ Eugene P. Malinowski
---------------------------
Eugene P. Malinowski
Director of Finance and
Chief Accounting Officer
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