Who could rake in the dough with Otis Spunkmeyer’s proposed IPO? The San Leandro, Calif.-based company is proposing an initial public offering (IPO) of $230 million in common stock that looks like a good deal for the company and its owners, but it may not fly with cautious investors … at least those who want to cash in on the plan in the short run.

In fact, in its June filing with the Securities and Exchange Commission, Otis Spunkmeyer noted several red flags for those who are looking to invest in the company.

Specifically, the equity earned by the manufacturer will be used primarily to pay down its debt, which carries a whopping 18.5% interest, and to pay off preferred stockholders.

The company also noted that there are investors who “will experience substantial dilution” in the value of purchase because prior investors who own the company were able to pay substantially less per share for stock then those who may buy into the IPO.

Specifically, the investment funds managed by Code Hennessy & Simmons LLC, and certain executive team members who bought Otis Spunkmeyer from founder Kenneth Rawlings in 2002, are expected to benefit the most from the proposed offering.

In addition to the shares that are up for sale, millions of other shares may soon be available for future purchase, which may put further pressure on the stock price, the company notes. In addition, Otis Spunkmeyer’s pre-IPO investors, whose interests may differ from those of new stockholders, will continue to control the company, the SEC filing noted.

Otis Spunkmeyer has experienced solid top-line sales growth over the past few years. In fact, 2005 sales topped $336 million, a 9.7% compounded annual growth rate, compared to 2000, when annual sales were just $211.9 million, the SEC filing noted. However, the company has incurred net losses in three out of its last five fiscal years. Through April 1, 2006, the company ran a deficit of $2 million and indicates that it needs to generate more revenue and lower costs.

Since 1996, Otis Spunkmeyer has been the No. 1 seller of frozen cookie dough to the foodservice industry in terms of volume. Overall, cookie dough accounts for 63% of its total sales, with muffin sales racking up 26% of sales and other products accounting for the remaining amount. The company’s four plants produce 10 million cookies and 1 million muffins daily. The Subway sandwich chain accounts for 15.7% of Otis Spunkmeyer’s overall sales.

Otis Spunkmeyer plans to expand sales primarily in the foodservice channel and to increase its presence in the retail channel, where it faces stiff competition from much larger snack producers, such as George Weston Bakeries, maker of Entenmann’s products, and Interstate Bakeries Corp., producer of Hostess sweet goods. However, Otis Spunkmeyer’s foodservice customers, such as SYSCO Corp., remain strong and account for 84% of its annual sales.

The American Bakers Association and the Allied Trades of the Baking Industry will host a reception in the Capital with Congressional leaders, followed by a dinner in the prestigious Mansfield Room, just a short distance from the floor of the United States Senate.

The reception will be part of a board of directors meeting among the two groups, to be held Sept. 13-14 in Washington, D.C.

The groups also will participate in a policy briefing by senior presidential advisors at the White House. These events will allow the baking industry to stress the importance of key policy issues such as health care, energy and commodities.

“This is a great opportunity for the leaders of the entire baking industry to expand ABA’s presence and impact in Washington,” said Ron Turano, ABA chairman and president of Turano Baking Co.

For more information, contact ABA at 1-202-789-0300.

In preparation for ongoing informational updates on its 17th Annual Convention and Trade Exposition, September 15-17 in Las Vegas, the Tortilla Industry Association (TIA) will be partnering with Stagnito Communications, publishers of Snack Food & Wholesale Bakery and Tortilla Trends magazines, to distribute news of show developments and to future educational and event partnerships in print and electronic media.

The magazine and the association are working to finalize the sponsorship agreement and to determine the best mix of direct and consulting support for targeted marketing activities, including using in-book and online promotional opportunities, educational programming, and event attendance.

The 2006 TIA convention promises to bring together a wider audience than in previous years, as educational training usually held in a separate technical seminar will be included in August. Advanced registration for the TIA convention is now open, and frequently updated information can be found at www.tortilla-info.com.

Among the Official Media Sponsors, Stagnito Communications was chosen based on its commitment to and reputation for delivering timely, relevant news to leaders in volume baking and snack food manufacturing. Additionally, its diverse portfolio of media, including Refrigerated & Frozen Foods and Industria Alimenticia, gives TIA members access to new markets in related food industries, both domestically and internationally. Subscription information for Stagnito publications can be found at www.stagnito.com.

Ocean Nutrition Canada Ltd. (ONC) has received an allowance of its petition for an excellent source nutrient content claim for foods containing both EPA (Eicosapentaenoic Acid) and DHA (Docosahexaenoic Acid) under the authoritative statement provisions of the Food and Drug Administration Modernization Act (FDAMA). The company is the supplier of MEG-3 brand Omega-3 EPA/DHA food and dietary supplement ingredients.

EPA and DHA are the two physiologically essential, long-chain polyunsaturated fatty acids found in fish oil, and both have been demonstrated to play important roles in human health and nutrition, ONC notes.

The ruling also means that companies can place certain claims on their packaging such as “An Excellent Source of Omega-3 EPA and DHA,” “High In Omega-3 EPA and DHA” or “Rich In Omega-3 EPA and DHA.” Product must contain a combined total of at least 32 mg. of EPA and DHA per serving to qualify for this claim. Those 32 mg. of EPA and DHA represent 20% of the daily value levels for EPA and DHA of the 160 mg. per day recommended by the Institute of Medicine. The claim also needs to include the statement that the product “contains ___ mg. of EPA and DHA per serving, which is ___ % of the 160 mg. daily value for a combination of EPA and DHA.”

Until now, food manufacturers only were able to use the nutrient content claim for an excellent source with DHA. While DHA is an important nutrient, companies were limited in their ability to differentiate to consumers that their foods contain both EPA and DHA, ONC says.

Ron Turano, the American Bakers Association’s chairman, has announced that Anne Giesecke, vice president of policy analysis, now is the president of a new environmental consulting business called A&D Policy Analysis, Inc.

“Dr. Giesecke has been an invaluable asset to the ABA,” says Turano, president of Turano Baking Co., Berwyn, Ill. “Her profound understanding of how our businesses operate and how they are affected by government policies has saved the baking industry millions of dollars. We are excited that ABA will have an ongoing relationship with Dr. Giesecke and that her knowledge and expertise will be available for the benefit of ABA members.”

Giesecke, a veteran of ABA for more than 15 years, currently serves as liaison to the ABA Safety Committee and the Energy and Environmental Health Committee. Her work with federal and state agencies on air and water issues is highly respected. Specifically, Giesecke was instrumental in mitigating the impact of the Clean Air Act on the baking industry. She provided key leadership in negotiating with the Environmental Protection Agency to allow bakers additional flexibility in complying with refrigerant requirements. In addition, Giesecke worked with the Food and Drug Administration on a number of sensitive science-based issues of concern for the baking industry.

“ABA is deeply indebted to Dr. Giesecke for her tremendous dedication and service to the wholesale baking industry,” says Robb MacKie, ABA president and CEO. “Her leadership on many critical environmental policy issues has mitigated significant compliance costs to bakers. In addition, her stewardship of the Energy and Environmental Health Committee helped the baking industry stay ahead of the curve on many potentially costly issues.”

As president of A&D Policy Analysis, Inc., Lincoln, Neb., Giesecke will continue her monthly environmental newsletter and consultative services to the baking industry. She will offer her expertise in developing and implementing sustainable business strategies for the industry.

Effective September 1, Giesecke can be reached at A&D, 5515 Sherman St., Lincoln, Neb. 68506, ph: 1-402-488-6136, a_giesecke@comcast.net.