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Philadelphia-Based Tasty Baking Raises Prices

Posted on: Wednesday, 2 November 2005, 21:00 CST

By Harold Brubaker, The Philadelphia Inquirer

Nov. 3--Responding to higher energy and packaging costs, Tasty Baking Co. is raising prices on its family packs and snack cakes in January.

The cost of individual Butterscotch Krimpets and other snack cakes will rise to $1.19 from 99 cents. Family pack boxes will go to $3.29 from $2.99. Single-serving pies will increase to 99 cents from 89 cents.

Past price increases led to declines in volume, but the company declined to comment on the projected impact this time around.

The Philadelphia company announced the changes yesterday as it reported that third-quarter sales increased 7.9 percent to $42.4 million from $39.3 million in the same period a year earlier.

Net income totaled $311,000, or 4 cents a share, up 43 percent from $217,000, or 3 cents a share, in the year-earlier period.

Tasty Baking said it had a 9.7 percent increase in third-quarter unit volume, driven by strong sales of family packs and new products such as Tasty Pastries and Tasty Minis.

This year's results included $93,000 before taxes from the sale of two distribution routes. But net income was cut in half by returns of stale Tastykakes from stores, as consumers struggling with higher gasoline prices cut back on Tastykakes.

Tasty Baking's shares have failed to gain ground under chief executive officer Charles P. Pizzi, who was hired three years ago to revive the regional company's flagging fortunes.

The shares closed yesterday at $8.13, down 17 cents, on the Nasdaq Stock Market. For more than a year they have traded in the range of $8 to $9.

To help its independent sales distributors, who travel the region with their blue-and-white panel trucks, deal with higher fuel and other expenses, Tasty Baking said it would increase the discount they received to 18 percent from 17.4 percent.

Also, in a change to retiree health-care benefits, Tasty Baking said that in January it would stop providing a subsidy for prescription-drug insurance to retirees over 65 because the retirees will be better off under the new federal Medicare drug coverage.

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Copyright (c) 2005, The Philadelphia Inquirer

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TBC, NDAQ,

Source: The Philadelphia Inquirer

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