07.28.2004

Interstate Bakeries Corp., the maker of Twinkies and other baked bread and sweet goods, said Wednesday that the Securities and Exchange Commission is conducting an informal inquiry following a July 8 announcement by the company's board audit committee that it had hired a law firm to examine the way it sets workers' compensation and other reserves.

The company said it intends to cooperate fully in the inquiry.

Interstate said on July 8 that it does not expect to release earnings for the fourth quarter and fiscal 2004 until the audit committee has reviewed the results of the investigation. The company took a $40 million charge on pretax income last month, saying it needed to increase its reserve for the fourth quarter.

Interstate also announced on July 8 the appointment of Ronald B. Hutchinson, who oversaw Kmart Corp.'s reorganization, as financial chief.

Shares of Interstate Bakeries were down 42 cents per share, or 4 percent, in late morning trading at $9.70 per share on the New York Stock Exchange.

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