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Flowers Foods, Inc. Message Board

  • odysseus_new odysseus_new Feb 4, 2000 12:07 AM Flag

    Did I read this right?

    The release I read said that it would be fiscal
    2001 when "margins" normalized. I thought this was to
    be fixed by now. Why would it take so long to
    correct the problem? Given the current stock value you'd
    think there might be a greater sense of urgency to get
    it righted. I know FLO and KBL have great
    manufacturing strengths in baking. Is pie-making markedly
    different and maybe they're not as adept in that arena? Or
    is the problem much more than just production? I
    cannot imagine a pie production problem that would take
    18 months to fix. Hell, Boeing fixed one of their
    production lines in a shorter time and they make something
    with 2 million parts.


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    • To be honest, your post prompted me to re-read
      the press releases. Much to my chagrin, FLO did say
      2001 before margins normalize (You want to see a rant
      regarding Mrs. Smiths, see my post 1325). I suspect not
      everybody caught this in the AM, or perhaps assumed it was
      a typo. Makes one wonder if that's not the reason
      for FLO's late afternoon sell-off.

      On a
      positive note, my re-read of the release made me feel
      better about the Bakery prospects for this year. Some
      pretty bold statements there, especially the declaration
      that we'd see record Cash Flows this year from the
      Bakery division (safe dividend).

      As to your
      specific criticism of the time it is taking to fix the pie
      equipment, I suspect that after over-promising and
      under-delivering through two quarters, management is setting us up
      for a positive surprise in 2000 for the pie business.

      • 1 Reply to RetiredPaperman
      • I've been keeping a close eye on the few comments
        from management over the months and have come to this
        conclusion as well: Management is most definitely setting
        the stage for upside surprises by doing what
        Microsoft has done for years. The latter half of this year
        is looking to be very rewarding once the blast
        freezer is old news and the conveyor work has been
        completed. Remember that the final packaging equipment is
        being uncrated and brought online at this time. Once
        all of this is accomplished, we should have clear

        Cash flow won't be a problem; therefore, the dividend
        can continue to be nominally increased in subsequent

        One of the biggest surprises looking out just 12
        months will be the earnings reported in February, 2001;
        I believe management is setting the stage for
        steady upside surprises as we approach the all-important
        Xmas season.

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