Hostess had ~$2.5b in revenue FY2011. ~$1b of expenses was employee pensions. The issue with the bottom line was not executive salaries.
RIP Hostess.
- Thread starter DocL
- Start date
With that much revenue look for some company to purchase the name and sell the leading moneymaker's. These products like so many others taste good to a child and not so much to an adult.
Then you're still in trouble. In 1998 Drake's was acquired by the company that owned Hostess, and their products have been made at Hostess plants. With the Hostess shutdown, you're not going to find Yodels or Ring Dings, either. (What, no love for Devil Dogs?
)Ref
Last edited:
Employee salaries, or employee pensions? I don't think any major manufacturing company has pension expenses that are 40 percent of revenue.
Also, since Hostess Brands is a privately-held company, its financial information is not available to the public, so any such numbers are guesses or the result of the illegal disclosure of confidential information. Once they go through Chapter 11 proceedings in the near future, though, those numbers will become public.
Last edited:
Then you're still in trouble. In 1998 Drake's was acquired by the company that owned Hostess, and their products have been made at Hostess plants. With the Hostess shutdown, you're not going to find Yodels or Ring Dings, either. (What, no love for Devil Dogs?
Ref
OK, now I'm really pissed.
Executive pay increases could be from a variety of reasons, just off the top of my head:
...among others. Either way, c-level pay increases don't come from the executive but from a board (if ownership knows anything) and are approved by the board even at private companies. I'm not privy to the specifics but a quick look at 2011 financials show negative 609 million in Retained Earnings and negative 449 million in Shareholder's Equity. If I'm correct, the private equity companies that own Hostess theoretically owe money. That said, I'm sure it's an accounting issue and a result of the debt bought by Silver Point and Monarch. Even so, ownership looks in an even worse position than their once work force. Certainly, it can't be said that they did not put forth their best efforts.
Considering all of the money the hedge funds put into Hostess even after several bankruptcies, I'd say they have every right to throw in the towel, dissolve the company, and sell the parts for as much as possible to recoup their investment.
My . 02: Adversarial unionism kills companies and this is a good example of its end result. There is no "win" in any of part of this situation and 18,500+ people face a very grim job market that doesn't reward lower skilled positions or an inexpensive re-education system.
I hope they find good work and soon.
- deferred compensation
- scheduled pay raise
- contractual salary requirement
...among others. Either way, c-level pay increases don't come from the executive but from a board (if ownership knows anything) and are approved by the board even at private companies. I'm not privy to the specifics but a quick look at 2011 financials show negative 609 million in Retained Earnings and negative 449 million in Shareholder's Equity. If I'm correct, the private equity companies that own Hostess theoretically owe money. That said, I'm sure it's an accounting issue and a result of the debt bought by Silver Point and Monarch. Even so, ownership looks in an even worse position than their once work force. Certainly, it can't be said that they did not put forth their best efforts.
Considering all of the money the hedge funds put into Hostess even after several bankruptcies, I'd say they have every right to throw in the towel, dissolve the company, and sell the parts for as much as possible to recoup their investment.
My . 02: Adversarial unionism kills companies and this is a good example of its end result. There is no "win" in any of part of this situation and 18,500+ people face a very grim job market that doesn't reward lower skilled positions or an inexpensive re-education system.
I hope they find good work and soon.
I disagree, all union power comes down to violence, and it's alive and kicking - literally. For example, we have the Longshore & Warehouse Union in Seattle this past September, where hundreds of union gentlemen stormed the docks with baseball bats, destroyed tons of grain, cut brake lines on railroad cars, and even took hostages. Or how about the systemic violence of the Buffalo Operating Engineers where they like to fill peoples' gas tanks with sand, throw hot coffee in non-union workers's faces, and conduct stabbings. Perhaps union violence isn't as bad as it once was 40 years ago - as you mentioned the Bakers Union here had no reported violence - but union violence is hardly a historical footnote.
I guess you're not a business owner. Profit is what counts the most at the end of day. Debt and the strike are what killed Hostess, not the execs. They just took Hostess off life support.
Where can you access their financials? Aren't they privately held?
And yes, it sounds like debt and financial losses led to their bankruptcy filing, not just union issues.
Last edited:
From what I understand the company was in hot water they needed to reduce their overhead and the unions would not let that happen. Union didn't believe they would close up shop. Apparently that didn't work out to well for them.
It was just a matter of time before NY banned the twinkie anyway.
It was just a matter of time before NY banned the twinkie anyway.
There are ways, my friend.
There are a variety of databases that track private companies and since Hostess used to be public before Silver Point and Monarch bought the company's debt, there are ways to trend fiscal kpi's if some are given. 2011 gross sales were 2.5 billion with a net income of (341 million) - that's a negative number. Annual gross sales show a decrease every year since 2003 with an operating loss every year since 2004, for a total loss of 1.275 billion. If labor and pension obligations are the majority of current and long term liabilities (which previous bankruptcy judges list as factors) then Hostess already had 2 strikes against it. The present pensions were already underfunded by 2 billion. Yes, 2 billion.
What's especially sad is that worker productivity was never higher than in 2011 and if some new products had taken off as forecasted, then with reasonable labor rates this company would gradually be in the black.
Rising labor rates and pension considerations only price labor out of the market and force companies to look to automate processes or hire new people...but elsewhere.
No, all union power does not come down to violence. I am surprised you would believe in a blanket statement like that. In this day and age of litigation, I would say its almost impossible for violence to be the norm. But I guess we will have to agree to disagree. I have this vivid picture in my head of Hostess workers throwing loaves of Wonder Bread through people's windows and 50 something matronly women throwing pens and chalk at people.
I would have to disagree here too. The business is run by the execs, the decision making, policy, marketing, R&D, and direction comes from them. If the company was close to bankruptcy, then that comes from them too. You can't blame the union strike for making that company fail. That strike was merely a byproduct from the inertia of the company set in motion by the people in control in their years of decision making.
In reference to profit, I don't think anyone in this thread said anything against profit. I don't think anyone in this thread is against profit, period. What I said was it is a slimy move for the execs to give themselves pay raises, orders of magnitude higher than their previous salary, while asking your work force to sacrifice, orders of magnitude less than what they were previously making.
Actually, the company was already in bankruptcy; they declared Chapter 11 in January (for the second time since 2004). They were trying to reorganize/restructure under the protection of the bankruptcy court. What happened this month was that they decided to cease operations.
The more healthy diet of US consumers was cited as one of the reasons for declining sales since 2004.
^I'm wondering if those are a eastern name brand, kinda like Carl's Jr here in so cal, vs. Hardee's to the east. I've never heard of drakes yodels and ring dings.
Yes. Ring Dings and Devil Dogs are well known to those of us who grew up in the Northeast. Unlike Carl Jr's, In-and-Out, etc. Here are photos from Wikipedia.^I'm wondering if those are a eastern name brand, kinda like Carl's Jr here in so cal, vs. Hardee's to the east. I've never heard of drakes yodels and ring dings.
Ring Ding:
Devil Dog:
Coffee Cake:
Yodels:
Last edited:
^I'm wondering if those are a eastern name brand, kinda like Carl's Jr here in so cal, vs. Hardee's to the east. I've never heard of drakes yodels and ring dings.
funny how iconic things like junk food can be regional...is'nt hellmans mayonase called something else west of the rockies.
The bottom line is they will not actually be "going away". There will be a liquidation sale which not only includes manufacturing equipment, etc but also the actual "brands" which have their own inherent "value". Someone will purchase "twinkies" and undboubtedly "wonder bread" among several other other of the caloric indulgences with which we grew up. The recent "hysteria" surrounding the purported demise of the twinkie actually is "good" for hostess since it will provide at least an artificial bump in its value in a liquidation sale.
^^^^ New record on NSXprime for the number of times "quote marks" are used in a single paragraph... :biggrin:
Let's not forget Funny Bones:
Similar threads
