Could Tastykake be sold?
A local favorite is looking for some help.
According to a Wednesday statement from Tastykake, production trouble and smaller than expected savings from the company’s new plant spell financial difficulty for the maker of Butterscotch Krimpets and other treats.
Bruce Raider, an assistant professor of finance at Temple University, said it’s a textbook cash-flow problem.
“Most people don’t realize that cash flow is what determines if you are going to survive or not,” said Raider. “They’ve added and equipped the new plant and they expected a lot of savings from the new plant and that is just not materializing.”
Tastykake is not accepting interview requests, although Tasty Baking Co. president and chief executive Charles Pizzi said in a printed statement that the company needs to move to its new factory in the former Navy Yard in South Philadelphia to remain relevant in the marketplace.
Pizzi said the company is reviewing possible financial and strategic options — including refinancing debt and potentially merging with another company — as part of the consolidation under way in the industry.
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