10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D C 20549

FORM 10-Q

(Mark One) [x]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 5, 2002
[  ]	OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________________  to _____________________________

Commission file number 1-16247

FLOWERS FOODS, INC.

(Exact name of registrant as specified in its charter)

GEORGIA	58-2582379
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

1919 FLOWERS CIRCLE, THOMASVILLE, GEORGIA

(Address of principal executive offices)

31757

(Zip Code)

229/226-9110

(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year,
if changed since last report)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

	OUTSTANDING AT
TITLE OF EACH CLASS	November 15 , 2002
Common Stock, $.01 par value with Preferred Share Purchase Rights	29,970,375

1

TABLE OF CONTENTS

		CONDENSED CONSOLIDATED BALANCE SHEET
		CONDENSED CONSOLIDATED INCOME STATEMENT
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 4. CONTROLS AND PROCEDURES
PART II. OTHER INFORMATION
	ITEM 1. LEGAL PROCEEDINGS
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 5. OTHER INFORMATION
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
CERTIFICATIONS
EX-3.2 AMENDED AND RESTATED BYLAWS
EX-21 SUBSIDIARIES OF FLOWERS FOODS, INC.
EX-99 SECTION 906 CERTIFICATION OF THE CEO & CFO

FLOWERS FOODS, INC.
INDEX

			PAGE
			NUMBER
PART I. Financial Information
	Item 1. Financial Statements
		Condensed Consolidated Balance Sheet October 5, 2002 and December 29, 2001	3
		Condensed Consolidated Statement of Income for the Twelve and Forty Weeks Ended October 5, 2002 and October 6, 2001	4
		Condensed Consolidated Statement of Cash Flows for the Forty Weeks Ended October 5, 2002 and October 6, 2001	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		22
	Item 4. Controls and Procedures		23
PART II. Other Information
	Item 1. Legal Proceedings		23
	Item 4. Submission of Matters to a Vote of Security Holders		24
	Item 5. Other Information		24
	Item 6. Exhibits and Reports on Form 8-K		24
SIGNATURES			25
CERTIFICATIONS			26

2

FLOWERS FOODS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Amounts in thousands except share data)
(Unaudited)

			OCTOBER 5, 2002			DECEMBER 29, 2001
ASSETS
	Current Assets:
	Cash and cash equivalents		$	5,542		$	12,280
	Accounts and notes receivable, net of allowances of $2,888 and       $1,271, respectively			128,713			104,104
	Inventories, net:
		Raw materials		28,810			18,593
		Packaging materials		13,266			13,942
		Finished goods		77,375			56,466
				119,451			89,001
	Spare parts and supplies			23,219			20,981
	Assets held for sale			17,054			18,025
	Other			15,340			8,149
				309,319			252,540
Property, Plant and Equipment:
	Land			33,873			33,324
	Buildings			269,214			267,184
	Machinery and equipment			682,689			656,727
	Furniture, fixtures and transportation equipment			69,419			67,797
	Construction in progress			9,849			8,570
				1,065,044			1,033,602
	Less: accumulated depreciation			(467,413	)		(423,170	)
				597,631			610,432
Notes Receivable				70,727			72,940
Deferred Taxes				7,166			16,084
Other Assets				18,440			22,015
Cost in Excess of Net Tangible Assets:
	Cost in excess of net tangible assets			175,786			174,913
	Less: accumulated amortization			(52,585	)		(49,233	)
				123,201			125,680
			$	1,126,484		$	1,099,691
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
	Current maturities of long-term debt and capital leases		$	21,470		$	15,648
	Accounts payable			98,608			83,980
	Facility closing costs and severance			6,314			4,830
	Other accrued liabilities			90,055			81,756
				216,447			186,214
Long-Term Debt and Capital Leases				223,631			242,057
Other Liabilities:
	Facility closing costs and severance			6,804			11,571
	Postretirement/postemployment obligations			23,954			25,466
	Other			14,139			12,746
				44,897			49,783
Shareholders’ Equity:
Preferred stock-$100 par value, 100,000 authorized and none issued
Preferred stock-$.01 par value, 900,000 authorized and none issued
Common stock-$.01 par value, 100,000,000 authorized and 29,797,513 and    29,797,513 shares issued, respectively				298			298
	Capital in excess of par value			476,401			476,401
	Retained earnings			165,818			149,842
	Accumulated other comprehensive loss			(1,008	)		(4,904	)
				641,509			621,637
			$	1,126,484		$	1,099,691

(See Accompanying Notes to Condensed Consolidated Financial Statements)

3

FLOWERS FOODS, INC.

CONDENSED CONSOLIDATED INCOME STATEMENT

(Amounts in thousands except per share data)

(Unaudited)

	FOR THE TWELVE WEEKS ENDED						FOR THE FORTY WEEKS ENDED
	OCTOBER 5, 2002			OCTOBER 6, 2001			OCTOBER 5, 2002			OCTOBER 6, 2001
Sales	$	389,839		$	385,699		$	1,231,792		$	1,220,174
Materials, supplies, labor and other production costs		211,935			205,527			664,848			655,014
Selling, marketing and administrative expenses		142,700			146,689			470,062			475,573
Depreciation and amortization		18,130			17,323			56,688			56,280
Insurance proceeds, net		—			—			—			(7,473	)
Severance and other closing charges		—			—			1,311			3,135
Separation and other contractual payments		—			—			—			27,952
Income from operations		17,074			16,160			38,883			9,693
Interest (income)		(1,298	)		(1,286	)		(4,330	)		(2,982	)
Interest expense		5,034			6,095			17,237			31,022
Interest expense, net		3,736			4,809			12,907			28,040
Income (loss) before income taxes and extraordinary gain		13,338			11,351			25,976			(18,347	)
Income tax expense (benefit)		5,135			2,875			10,001			(4,846	)
Income (loss) before extraordinary gain		8,203			8,476			15,975			(13,501	)
Extraordinary gain on early extinguishment of debt		—			—			—			5,000
Net income (loss)	$	8,203		$	8,476		$	15,975		$	(8,501	)
Net Income (Loss) Per Common Share:
Basic:
Income (loss) before extraordinary gain on early extinguishment of debt	$	0.28		$	0.28		$	0.54		$	(0.45	)
Extraordinary gain on early extinguishment of debt		—			—			—			0.17
Net income (loss) per share	$	0.28		$	0.28		$	0.54		$	(0.28	)
Weighted average shares outstanding		29,798			29,798			29,798			29,798
Diluted:
Income (loss) before extraordinary gain on early extinguishment of debt	$	0.27		$	0.28		$	0.52		$	(0.45	)
Extraordinary gain on early extinguishment of debt		—			—			—			0.17
Net income (loss) per share	$	0.27		$	0.28		$	0.52		$	(0.28	)
Weighted average shares outstanding		30,218			30,291			30,579			29,798
Cash Dividends Paid Per Common Share		—			—			—			—

(See Accompanying Notes to Condensed Consolidated Financial Statements)

4

FLOWERS FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

		FOR THE FORTY WEEKS ENDED WEEKS ENDED
		OCTOBER 5, 2002			OCTOBER 6, 2001
CASH FLOWS (DISBURSED FOR) RECEIVED FROM OPERATING ACTIVITIES:
Net income (loss)		$	15,975		$	(8,501	)
Adjustments to reconcile net income (loss) to net cash (disbursed for) received from operating activities:
	Extraordinary gain, net of tax		—			(5,000	)
	Unusual charges		—			3,135
	Depreciation and amortization		56,688			56,280
	Deferred income taxes		11,147			(4,846	)
	Inventory lower of cost or market adjustments		2,667			2,904
	Allowances for accounts receivable		2,599			1,845
	Non-cash effect of derivative instruments		—			6,283
	Other		—			(13	)
Changes in assets and liabilities:
	Accounts and notes receivable, net		(27,193	)		(16,226	)
	Inventories, net		(33,117	)		(40,251	)
	Other assets		(3,785	)		9,810
	Accounts payable and other accrued liabilities		21,369			(7,171	)
	Facility closing costs and severance		(2,094	)		(4,483	)
NET CASH (DISBURSED FOR) RECEIVED FROM OPERATING ACTIVITIES			44,256			(6,234	)
CASH FLOWS (DISBURSED FOR) RECEIVED FROM INVESTING ACTIVITIES:
	Purchase of property, plant and equipment		(39,495	)		(33,599	)
	Proceeds from/(purchase of) notes receivable		2,198			(77,646	)
	Acquisitions net of divestitures		—			(6,381	)
	Dividends received		—			5,197
	Proceeds from property disposals		409			25
	Other		359			(2,951	)
NET CASH (DISBURSED FOR) INVESTING ACTIVITIES			(36,529	)		(115,355	)
CASH FLOWS (DISBURSED FOR) RECEIVED FROM FINANCING ACTIVITIES:
	Stock compensation and warrants exercised		—			337
	Proceeds from new credit agreement		—			251,000
	Purchase of debentures		—			(193,776	)
	Payment of financing fees		—			(9,978	)
	Other debt and capital lease obligation payments		(14,465	)		(6,225	)
	Other net changes in debt and other liabilities in connection with the spin-off and merger		—			73,099
NET CASH (DISBURSED FOR) RECEIVED FROM FINANCING ACTIVITIES			(14,465	)		114,457
Net decrease in cash and cash equivalents			(6,738	)		(7,132	)
Cash and cash equivalents at beginning of period			12,280			11,845
Cash and cash equivalents at end of period		$	5,542		$	4,713

(See Accompanying Notes to Condensed Consolidated Financial Statements)

5

FLOWERS FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. BASIS OF PRESENTATION

INTERIM FINANCIAL STATEMENTS — The accompanying unaudited condensed consolidated financial statements of Flowers Foods, Inc. (“the company”) have been prepared by the company’s management in accordance with generally accepted accounting principles for interim financial information and applicable rules and regulations of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of October 5, 2002 and December 29, 2001, the results of operations for the twelve and forty week periods ended October 5, 2002 and October 6, 2001 and statement of cash flows for the forty week periods ended October 5, 2002 and October 6, 2001. The results of operations for the twelve and forty week periods ended October 5, 2002 and October 6, 2001 are not necessarily indicative of the results to be expected for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2001.

ESTIMATES — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements: revenue recognition, allowance for doubtful accounts, derivative instruments, lower of cost or market for obsolete and unmarketable inventory, valuation of long-lived assets and goodwill and deferred tax asset valuation allowances. These policies are the same as those summarized in the company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2001, except as discussed in Note 4 below.

REPORTING PERIODS — The company’s quarterly reporting periods for fiscal 2002 are as follows: first quarter ended April 20, 2002 (sixteen weeks), second quarter ended July 13, 2002 (twelve weeks), third quarter ended October 5, 2002 (twelve weeks) and fourth quarter ending December 28, 2002 (twelve weeks).

RECLASSIFICATIONS — Certain reclassifications of prior period data have been made to conform with the current period reporting.

SIGNIFICANT CUSTOMER — During the forty weeks ended October 5, 2002, sales to the company’s largest customer were 10.6% of the consolidated company’s sales with 8.1% attributable to Flowers Bakeries and 2.5% attributable to Mrs. Smith’s Bakeries.

SEGMENTS – Effective July 14, 2002 (the first day of the third quarter of fiscal year 2002), the company’s two operating segments, Flowers Bakeries, LLC (“Flowers Bakeries”) and Mrs. Smith’s Bakeries, LLC (“Mrs. Smith’s Bakeries”), were restructured to form three operating segments. These segments are Flowers Bakeries, Mrs. Smith’s Bakeries and Flowers Snack, LLC (“Flowers Snack”). Flowers Snack consists of the snack business previously operated by Mrs. Smith’s Bakeries. As Mrs. Smith’s Bakeries and Flowers Snack historically shared certain administrative and division expenses, certain allocations and assumptions have been made in order to present historical comparative information for Mrs. Smith’s Bakeries and Flowers Snack as separate segments. In most instances, administrative and division expenses have been allocated between the two segments based on cases of product sold. In the opinion of management, the allocations have been made on a reasonable basis. Management believes that the amounts are reasonable estimations of the costs that would have been incurred had Mrs. Smith’s Bakeries and Flowers Snack performed these functions as separate divisions.

2. SPIN-OFF AND MERGER TRANSACTION

     On March 26, 2001, Flowers Industries, Inc. (“FII”) completed a transaction that resulted in the spin-off of Flowers Foods and the merger of FII with a wholly owned subsidiary of the Kellogg Company (“Kellogg”). In the transaction, FII transferred the stock of its two wholly-owned subsidiaries, Flowers Bakeries, Inc. and Mrs. Smith’s Bakeries, Inc. and all other assets and liabilities directly held by FII (except for its majority interest in Keebler Foods Company (“Keebler”) and certain debt, other liabilities and transaction costs) to Flowers Foods. FII distributed all of the outstanding shares of common stock of Flowers Foods to then existing FII shareholders such that FII shareholders received one share of Flowers Foods

6

common stock for every five shares of FII they owned. FII, which consisted solely of its majority interest in Keebler and the aforementioned liabilities, was simultaneously merged with a wholly owned subsidiary of Kellogg. The cash purchase price paid by Kellogg, less the aforementioned liabilities and certain other transaction costs, resulted in net proceeds paid directly to FII shareholders of $1,241.6 million.

     In connection with the spin-off and merger transaction, various separation and other contractual payments under FII’s stock and incentive programs of $39.0 million were paid to executive and non-executive officers and employees. Of this amount, $5.7 million was accrued at March 26, 2001, and $5.3 million was amortized to earnings prior to March 26, 2001. Accordingly, in the first quarter of fiscal 2001, a charge of $28.0 million was recorded as an unusual charge to the company’s continuing operations, with a corresponding credit to capital in excess of par value, as a result of payments being settled from the proceeds of the spin-off and merger transaction.

3. COMPREHENSIVE INCOME

     The company has other comprehensive income resulting from its accounting for derivative financial instruments (see Note 7). Total comprehensive income (loss), determined as net income (loss) adjusted by other comprehensive income (loss), was $19.9 million and $(13.4) million for the forty weeks ended October 5, 2002 and October 6, 2001, respectively.

4. GOODWILL AND OTHER INTANGIBLE ASSETS

     The company adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”) on December 30, 2001 (the first day of fiscal 2002). This standard provides accounting and disclosure guidance for acquired intangibles. Under this standard, goodwill and “indefinite-lived” intangibles are no longer amortized, but are tested at least annually for impairment. If the asset is determined to be impaired, an impairment loss would be recognized to reduce carrying value to fair value. Transitional impairment tests of goodwill and non-amortized intangibles are also performed upon adoption of SFAS No. 142, with any recognized impairment loss reported as the cumulative effect of an accounting change at the date of adoption.

     SFAS 142 requires that goodwill be tested annually for impairment using a two-step process. The first step is to identify a potential impairment and, in transition, this step must be measured as of the beginning of the fiscal year. The company has completed step one of the transitional impairment test as required. The results of the test performed in step one indicate an impairment of goodwill related to the Mrs. Smith’s division. Step two of the transitional impairment test is currently in process. The second step of the impairment test, which measures the amount of the impairment loss (measured as of the beginning of the fiscal year), if any, must be completed by the end of the company’s 2002 fiscal year. The company anticipates a goodwill impairment charge of $20 to $30 million to be recorded as of December 30, 2001 (the first day of fiscal 2002) as a cumulative effect of a change in accounting principle by the end of fiscal 2002. Further, management expects the adoption of SFAS 142 to reduce the company’s amortization expense for goodwill and other intangibles by approximately $4.0 million annually ($2.5 million, net of tax), beginning on December 30, 2001. Through the end of the third quarter of fiscal 2002, the company has reduced its amortization expense by $2.9 million as a result of the adoption of SFAS 142.

     Intangible assets deemed to have an indefinite life were tested for impairment using a one-step process that compares the fair value of the asset to the carrying amount of the asset as of the date of adoption (the beginning of this fiscal year). Pursuant to the requirements of SFAS 142, this transitional impairment test was completed during the first quarter of fiscal 2002 and no impairment losses were required to be recognized.

7

     The following table sets forth the information for goodwill and other intangible assets:

		OCTOBER 5, 2002		DECEMBER 29, 2001
		(amounts in thousands)
Goodwill, net		$	79,576	$	79,975
Intangible assets not subject to amortization:
	Trademarks		29,538		29,538
	Other		903		903
Intangible assets subject to amortization:
	Trademarks		4,340		3,237
	Customer relationships		6,891		8,056
	Non-compete agreements		913		2,567
	Other		1,040		1,404
	Total intangible assets, net	$	123,201	$	125,680

     Of the $79.6 million of goodwill at October 5, 2002, $53.4 million, $25.3 million and $0.9 million is recorded at Flowers Bakeries, Mrs. Smith’s Bakeries and Flowers Snack, respectively.

     During the first quarter of fiscal 2002, Mrs. Smith’s Bakeries recorded a $1.2 million adjustment to reduce certain exit cost liabilities with offsetting entries of $0.7 million and $0.5 million, to goodwill and deferred taxes, respectively. These liabilities and the related goodwill and deferred taxes were recorded in fiscal 1996 as a result of the purchase of Mrs. Smith’s Bakeries and the subsequent closure of its Pottstown, Pennsylvania production facility. This adjustment is the result of more accurate information regarding medical and worker’s compensation expenses.

     The provisions of SFAS No. 142 are adopted prospectively and prior-period financial statements are not restated. Comparative earnings information for prior periods is presented in the following tables:

	FOR THE TWELVE WEEKS ENDED				FOR THE FORTY WEEKS ENDED
	OCTOBER 5, 2002		OCTOBER 6, 2001		OCTOBER 5, 2002		OCTOBER 6, 2001
	(amounts in thousands)
Reported income (loss) before extraordinary gain	$	8,203	$	8,476	$	15,975	$	(13,501	)
Add back: goodwill amortization, net of tax		—		521		—		1,769
Add back: trademark amortization, net of tax		—		177		—		589
Adjusted income (loss) before extraordinary gain	$	8,203	$	9,174	$	15,975	$	(11,143	)
BASIC EARNINGS PER SHARE:
Reported income (loss) before extraordinary gain	$	0.28	$	0.28	$	0.54	$	(0.45	)
Goodwill amortization, net of tax		—		0.02		—		0.06
Trademark amortization, net of tax		—		0.01		—		0.02
Adjusted income (loss) before extraordinary gain	$	0.28	$	0.31	$	0.54	$	(0.37	)
DILUTED EARNINGS PER SHARE:
Reported income (loss) before extraordinary gain	$	0.27	$	0.28	$	0.52	$	(0.45	)
Goodwill amortization, net of tax		—		0.02		—		0.06
Trademark amortization, net of tax		—		0.01		—		0.02
Adjusted income (loss) before extraordinary gain	$	0.27	$	0.31	$	0.52	$	(0.37	)

8

	FOR THE TWELVE WEEKS ENDED				FOR THE FORTY WEEKS ENDED
	OCTOBER 5, 2002		OCTOBER 6, 2001		OCTOBER 5, 2002		OCTOBER 6, 2001
	(amounts in thousands)
Reported net income (loss)	$	8,203	$	8,476	$	15,975	$	(8,501	)
Add back:goodwill amortization, net of tax		—		521		—		1,769
Add back:trademark amortization, net of tax		—		177		—		589
Adjusted net income (loss)	$	8,203	$	9,174	$	15,975	$	(6,143	)
BASIC EARNINGS (LOSS) PER SHARE:
Reported net income (loss)	$	0.28	$	0.28	$	0.54	$	(0.28	)
Goodwill amortization, net of tax		—		0.02		—		0.06
Trademark amortization, net of tax		—		0.01		—		0.02
Adjusted net income (loss)	$	0.28	$	0.31	$	0.54	$	(0.20	)
DILUTED EARNINGS (LOSS) PER SHARE:
Reported net income (loss)	$	0.27	$	0.28	$	0.52	$	(0.28	)
Goodwill amortization, net of tax		—		0.02		—		0.06
Trademark amortization, net of tax		—		0.01		—		0.02
Adjusted net income (loss)	$	0.27	$	0.31	$	0.52	$	(0.20	)

5. RECLASSIFICATION OF COUPON AND SLOTTING COSTS

     Effective December 30, 2001 (the first day of fiscal 2002), the company has applied the consensus reached by the Emerging Issues Task Force (“EITF”) of the Financial Accounting Standards Board (“FASB”) in Issue No. 01-9, “Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor’s Products.” EITF Issue No. 01-9 codifies and reconciles the Task Force consensuses on all or specific aspects of EITF Issues No. 00-14, “Accounting for Certain Sales Incentives,” No. 00-22, “Accounting for ‘Points’ and Certain Other Time-Based or Volume-Based Sales Incentives Offers, and Offers for Free Products or Services to be Delivered in the Future,” and No. 00-25, “Vendor Income Statement Characterization of Consideration Paid to a Reseller of the Vendor’s Products” and identifies other related interpretive issues. The company adopted the provisions of EITF Issue No. 00-22 on December 31, 2000. EITF Issue No. 01-9 requires certain selling expenses incurred by the company, not previously reclassified (primarily coupon and slotting costs), to be classified as reductions of sales. The adoption of the remaining items included in EITF Issue No. 01-9 (EITF 00-14 and EITF 00-25) resulted in the company reducing both sales and selling, marketing and administrative expenses by an aggregate of approximately $0.6 and $4.1 million for the twelve and forty weeks, respectively, ended October 5, 2002. Prior year aggregate amounts of zero and $1.6 million, respectively, for the twelve and forty weeks ended October 6, 2001 have also been reclassified to reflect this change. These reclassifications have no impact on net income.

6. NEW ACCOUNTING PRONOUNCEMENTS

     In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations,” which addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement will be effective for the company beginning in the first quarter of fiscal 2003. Management does not expect the adoption of this statement to have a material impact on the company’s results of operations or financial position.

     In October 2001, the FASB issued SFAS No. 144 (“SFAS 144”), “Accounting for Impairment or Disposal of Long-lived Assets,” which supercedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of” and the accounting and reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions” for the disposal of a segment of a business. SFAS 144 clarifies and revises existing guidance on accounting for impairment of plant, property, and equipment, amortizable intangibles and other long-lived assets not specifically addressed in other accounting literature. SFAS 144 also broadens the presentation of discontinued operations to include a component of an entity rather than only a segment of a business. The company adopted this statement on December 30, 2001 (the first day of fiscal 2002) on a prospective basis.

     In April 2002, the FASB issued SFAS No. 145 (“SFAS 145”), “Rescission of SFAS Nos. 4, 44, and 64, Amendment of SFAS 13, and Technical Corrections as of April 2002.” This statement rescinds SFAS No. 4, “Reporting Gains and Losses from Extinguishment of Debt,” and an amendment of that Statement, SFAS No. 64, “Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.” This Statement also rescinds SFAS No. 44, “Accounting for Intangible Assets of Motor Carriers.” This Statement amends SFAS No. 13, “Accounting for Leases,” to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. SFAS 145 will be effective for fiscal 2003, which begins on December 29, 2002. Management does not expect the adoption of this statement to have a material impact on the company's results of operations.

     In July 2002, the FASB issued SFAS No. 146 (“SFAS 146”), “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS 146 addresses the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, including costs related to terminating a contract that is not a capital lease and termination benefits that employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation contract. SFAS 146 supersedes EITF Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred in a Restructuring),” which recognizes certain exit

9

costs when management commits to a plan and requires liabilities associated with exit and disposal activities to be expensed as incurred. SFAS 146 will be effective for exit or disposal activities of the company that are initiated on or after December 29, 2002 (the first day of fiscal 2003).

7. DERIVATIVE FINANCIAL INSTRUMENTS

     The company enters into commodity derivatives, designated as cash flow hedges of existing or future exposure to changes in commodity prices. The company’s primary raw materials are flour, sugar, shortening, fruits and dairy products, along with pulp and paper, aluminum and petroleum-based packaging products. The company also enters into interest rate derivatives to hedge exposure to changes in interest rates.

     During the forty weeks ended October 5, 2002, changes to accumulated other comprehensive loss, net of tax, resulting from hedging activities were as follows:

	DR/(CR)
	(amounts in
	thousands)
Accumulated other comprehensive loss at December 29, 2001	$	4,904
Net deferred gains on closed contracts		418
Reclassified to earnings (materials, supplies, labor and other production costs)		(545	)
Effective portion of change in fair value of hedging instruments		(3,769	)
Accumulated other comprehensive loss at October 5, 2002	$	1,008

     Of the $1.0 million in accumulated other comprehensive loss, approximately $(0.5) million, $2.1 million and $(0.4) million were related to instruments expiring in fiscal 2002, 2003 and 2004, respectively, and $(0.2) million was related to deferred gains and losses on cash flow hedge positions.

     As of October 5, 2002, the company’s hedge portfolio contained commodity derivatives with a fair value of $3.8 million which is primarily recorded in other current assets and other long term assets. The positions held in the portfolio are used to hedge economic exposure to changes in various raw material prices and effectively fix the price, or limit increases in prices, for a period of time extending into fiscal 2004. Under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”), instruments with a fair value of $3.8 million on October 5, 2002 are designated as cash-flow hedges. The effective portion of changes in fair value for these derivatives is recorded each period in other comprehensive income, and any ineffective portion of the change in fair value is recorded to current period earnings in selling, marketing and administrative expenses. An immaterial amount of commodity derivatives at October 5, 2002 is related to hedge instruments that do not qualify for hedge accounting under SFAS 133. For these instruments, changes in fair value are recorded each period in selling, marketing and administrative expense. During the forty weeks ended October 5, 2002, $0.4 million in income was recorded to current earnings due to changes in fair value of these instruments.

     In April 2001, the company entered into an interest rate swap transaction with a notional amount of $150.0 million, expiring on December 31, 2003, in order to effectively convert a designated portion of its borrowings under its credit agreement dated March 26, 2001 to a fixed-rate instrument. The interest rate swap agreement results in the company paying or receiving the difference between the fixed and floating rates at specified intervals calculated based on the notional amounts. The interest rate differential to be paid or received is accrued as interest rates change and is recorded as interest expense. Under SFAS 133, this swap transaction is designated as a cash-flow hedge. Accordingly, the effective portion of the change in the fair value of the swap transaction is recorded each period in other comprehensive income. The ineffective portion of the change in fair value is recorded to current period earnings in selling, marketing and administrative expenses. The fair value of the interest rate swap on October 5, 2002 was a liability of $(5.7) million which is recorded in other accrued liabilities and other long term liabilities. During the forty weeks ended October 5, 2002, $4.8 million of additional interest expense was recognized due to periodic settlements of the swap. There was no ineffectiveness recorded to current earnings related to the interest rate swap.

10

8. DEBT

     Long-term debt consisted of the following at October 5, 2002 and December 29, 2001 (amounts in thousands):

		INTEREST
		RATE			MATURITY		OCTOBER 5, 2002		DECEMBER 29, 2001
Senior Secured Credit Facilities			4.53	%		2007	$	180,258	$	189,250
Capital Lease Obligations			4.72	%		2008		57,904		60,389
Other Notes Payable			7.47	%		2004		6,939		8,066
								245,101		257,705
Less Current Maturities								21,470		15,648
	Total Long-Term Debt						$	223,631	$	242,057

     In fiscal 2001, the company purchased certain fixed assets that were previously leased under operating leases. In addition, on March 26, 2001, the company purchased the notes receivable (“distributor notes”) from its independent distributors that had been previously owned by a third party financial institution and serviced by the company or a wholly owned subsidiary of the company. On March 26, 2001, the company completed a tender offer for the $200 million aggregate principal amount of 7.15% Debentures due 2028 (the “debentures”) and repurchased substantially all the debentures at a discount. Accordingly, in the first quarter of fiscal 2001, the company recorded an extraordinary gain of approximately $5.0 million, net of tax, related to the early extinguishment of these debentures.

     The purchases of the fixed assets, distributor notes and debentures were financed primarily from the proceeds of a credit agreement entered into by the company on March 26, 2001. At inception, the credit agreement provided for total borrowings of up to $380 million, consisting of Term Loan A of $100 million, Term Loan B of $150 million and a revolving loan facility of $130 million. Loans under the credit agreement are collateralized by substantially all of the assets of the company, excluding real property.

     The credit agreement includes certain restrictions, which, among other things, require maintenance of financial covenants, restrict encumbrance of assets and creation of indebtedness and limit capital expenditures, repurchases of common shares and dividends. Restrictive financial covenants include such ratios as a consolidated interest coverage ratio, a consolidated fixed charge coverage ratio and a maximum total leverage ratio. Capital expenditures cannot exceed $50.0 million in fiscal 2002. In fiscal 2002 and beyond, dividends cannot exceed $5.0 million, unless certain conditions are met. At October 5, 2002, the company was in compliance with these restrictive financial covenants.

9. FACILITY CLOSING COSTS AND SEVERANCE

     Effective July, 14, 2002 (the first day of the third quarter of fiscal 2002), the company’s two operating segments, Flowers Bakeries and Mrs. Smith’s Bakeries, were restructured to form three operating segments. These segments are Flowers Bakeries, Mrs. Smith’s Bakeries and Flowers Snack. Flowers Snack consists of the snack business previously operated by Mrs. Smith’s Bakeries. The three operating segments intend to share certain administrative services. During the second quarter of fiscal 2002, in connection with the restructuring, the company eliminated approximately 70 positions and recorded a charge of $1.3 million. This charge consisted of $1.0 million in severance and $0.3 million in legal and other contract termination fees.

     During the first quarter of fiscal 2002, Mrs. Smith’s Bakeries recorded a $1.2 million adjustment to reduce certain exit cost liabilities recorded in fiscal 1996 as a result of the purchase of Mrs. Smith’s Bakeries and subsequent closure of its Pottstown, Pennsylvania production facility. This adjustment is a result of more accurate information regarding medical and worker’s compensation expenses.

11

     The company has continuing obligations in connection with certain plant closings completed in the current and prior years. Activity with respect to these obligations is as follows (amounts in thousands):

	PROVISION/
	12/29/2001		(ADJUSTMENT)			SPENDING			10/5/2002
Noncancelable lease obligations and other facility closing costs	$	13,489	$	—		$	(2,575	)	$	10,914
Severance		239		963			(576	)		626
Other		2,673		(842	)		(253	)		1,578
Total	$	16,401	$	121		$	(3,404	)	$	13,118

10. LITIGATION

     On March 25, 2002, in Trans American Brokerage, Inc. vs. Mrs. Smith’s Bakeries, Inc., an arbitration brought before the American Arbitration Association, an arbitrator found against Mrs. Smith’s Bakeries and issued an interim award for damages. In the dispute, the claimant alleged breach of a sales brokerage agreement by Mrs. Smith’s Bakeries and sought lost profits as well as attorneys’ fees and costs. As a result of the award, the company recorded a $10.0 million charge ($6.2 million after tax) to its results for the fiscal year ended December 29, 2001 as required by generally accepted accounting principles. The charge represents the company’s estimate of the total costs (including attorney’s fees and expenses) which it could incur in connection with this dispute. The provisions of this award also provide for the accrual of post-petition interest until such award is settled or paid. During the forty weeks ended October 5, 2002, the company recorded $0.6 million in interest expense related to this award.

     On April 23, 2002, the company filed a Motion for Reconsideration on the issue of damages. That Motion was denied, and a Final Award was entered on June 11, 2002. On June 26, 2002, the company filed a Motion to Vacate the Final Award in the United States District Court for the Eastern District of Pennsylvania. On July 17, 2002, Trans American Brokerage, Inc. filed a Petition to Confirm Arbitration Award and Enforce Judgment in the same Court. Both the Motion to Vacate and the Petition have been fully briefed, and the parties are waiting for a decision from the Court.

12

NOTE 11. EARNINGS PER SHARE

The following table calculates basic earnings per common share and diluted earnings per common share at October 5, 2002 and October 6, 2001.

	FOR THE TWELVE WEEKS ENDED				FOR THE FORTY WEEKS ENDED
	OCTOBER 5, 2002		OCTOBER 6, 2001		OCTOBER 5, 2002		OCTOBER 6, 2001
Basic Earnings (Loss) Per Common Share:
Income (loss) before extraordinary gain on early extinguishment of debt	$	8,203	$	8,476	$	15,975	$	(13,501	)
Basic weighted average shares outstanding		29,798		29,798		29,798		29,798
Basic earnings (loss) per common share	$	0.28	$	0.28	$	0.54	$	(0.45	)
Diluted Earnings (Loss) Per Common Share:
Income (loss) before extraordinary gain on early extinguishment of debt	$	8,203	$	8,476	$	15,975	$	(13,501	)
Basic weighted average shares outstanding		29,798		29,798		29,798		29,798
Add: Shares of common stock assumed issued upon exercise of dilutive stock options		420		493		781		0
Diluted weighted average shares outstanding		30,218		30,291		30,579		29,798
Diluted earnings (loss) per common share	$	0.27	$	0.28	$	0.52	$	(0.45	)

Stock options to purchase 274,000 shares of common stock for the forty weeks ended October 6, 2001 were not included in the computation of diluted earnings per share because their effect would have been antidilutive.

12. SEGMENT REPORTING

     At the end of the third quarter of fiscal 2002, the company had three reportable segments, Flowers Bakeries, Mrs. Smith’s Bakeries and Flowers Snack. Flowers Bakeries produces fresh breads and rolls, Mrs. Smith’s Bakeries produces frozen baked desserts, snacks, breads and rolls and Flowers Snack produces fresh snacks. The segments are managed as strategic business units due to their distinct production processes and marketing strategies. The company evaluates each segment’s performance based on income or loss before interest and income taxes, excluding unallocated expenses and charges which the company’s management deems to be unusual and not reflective of the segments’ core operating businesses. Information regarding the operations in these reportable segments is as follows (amounts in thousands):

		FOR THE TWELVE WEEKS ENDED						FOR THE FORTY WEEKS ENDED
		OCTOBER 5, 2002			OCTOBER 6, 2001			OCTOBER 5, 2002			OCTOBER 6, 2001
SALES:
	Flowers Bakeries	$	248,904		$	246,421		$	822,386		$	818,503
	Mrs. Smith’s Bakeries		113,554			113,280			317,805			310,165
	Flowers Snack		40,070			39,465			136,771			140,257
	Elimination (1)		(12,689	)		(13,467	)		(45,170	)		(48,751	)
		$	389,839		$	385,699		$	1,231,792		$	1,220,174
DEPRECIATION AND AMORTIZATION:
	Flowers Bakeries	$	10,502		$	11,024		$	34,685		$	35,672
	Mrs. Smith’s Bakeries		6,416			5,363			17,447			16,721
	Flowers Snack		1,168			893			4,411			3,743
	Unallocated corporate expenses		44			43			145			144
		$	18,130		$	17,323		$	56,688		$	56,280
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAX AND EXTRAORDINARY GAIN:
	Flowers Bakeries	$	20,069		$	17,546		$	71,251		$	57,160
	Mrs. Smith’s Bakeries		(1,042	)		981			(21,425	)		(16,001	)
	Flowers Snack		3,538			2,798			8,811			12,260
	Unallocated corporate expenses		(5,491	)		(5,165	)		(18,443	)		(20,112	)
	Unallocated interest expense, net		(3,736	)		(4,809	)		(12,907	)		(28,040	)
	Insurance proceeds (2)		0			0			0			7,473
	Unusual charges (3)		0			0			(1,311	)		(31,087	)
		$	13,338		$	11,351		$	25,976		$	(18,347	)

(1)	Represents elimination of intersegment sales from Flowers Snack to Flowers Bakeries and Mrs. Smith’s Bakeries to Flowers Bakeries.
(2)	Represents proceeds from insurance settlement at Mrs. Smith’s Bakeries.
(3)	Represents a $1.3 million charge at Mrs. Smith’s Bakeries in the second quarter of fiscal 2002, a $3.1 million charge at Flowers Bakeries in the second quarter of fiscal 2001 and separation and other contractual payments related to the spin-off and merger transaction made in the first quarter of fiscal 2001 of $8.3 million, $4.8 million, $1.7 million and $13.1 million at Flowers Bakeries, Mrs. Smith’s Bakeries, Flowers Snack and corporate, respectively.

13. SUBSEQUENT EVENTS

     On November 18, 2002, Flowers Foods reached an agreement with Kellogg Company to acquire all the assets of Bishop Baking Company, Inc. in Cleveland, Tennessee. Terms of the agreement have not been disclosed. The transaction is expected to be completed in early January 2003. Bishop Baking Company, with annual sales of approximately $30 million, operates one bakery in Cleveland, Tennessee. Bishop’s products, which include a line of fresh snack cake items, are distributed nationwide.

     On November 15, 2002, the board of directors of Flowers Foods declared a dividend of $.05 per share on the company’s common stock payable on December 13, 2002, to shareholders of record on November 29, 2002.

     On November 15, 2002, the board of directors of Flowers Foods approved an amendment to the company’s shareholder rights plan allowing certain investors, including existing investors and qualified institutional investors, to beneficially own up to 20% of the company’s outstanding common stock. Previously, the rights agreement limited all shareholders to less than 15% of the outstanding shares.

     On October 25, 2002, Flowers Foods announced it had acquired Ideal Baking Company, Inc., in Batesville, Arkansas for a purchase price which included cash, shares of Flowers Foods common stock and the assumption of debt. Ideal Baking Company, which had annual sales of approximately $15 million in 2001, employs 280 people and operates approximately 75 bakery routes from its Batesville, Arkansas bakery that serve customers in northern Arkansas, southern Missouri and Memphis, Tennessee.

13

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS:

     The following discussion of the financial condition and results of operations for the twelve and forty week periods ended October 5, 2002 should be read in conjunction with the company’s annual report on Form 10-K for the fiscal year ended December 29, 2001.

CRITICAL ACCOUNTING POLICIES:

     Our financial statements are prepared in accordance with generally accepted accounting principles (“GAAP”). These principles are numerous and complex. Our significant accounting policies are summarized in the footnotes to our financial statements in the company’s annual report on Form 10-K for the fiscal year ended December 29, 2001. In many instances, the application of GAAP requires management to make estimates or to apply subjective principles to particular facts and circumstances. A variance in the estimates used or a variance in the application or interpretation of GAAP could yield a materially different accounting result. In our Form 10-K for the fiscal year ended December 29, 2001, we discuss the areas where we believe that the estimations, judgments or interpretations that we have made, if different, would have yielded the most significant differences in our financial statements and we urge you to review that discussion.

MATTERS AFFECTING ANALYSIS:

     Effective July 14, 2002 (the first day of the third quarter of fiscal 2002), the company’s two operating segments, Flowers Bakeries, LLC (“Flowers Bakeries”) and Mrs. Smith’s Bakeries, LLC (“Mrs. Smith’s Bakeries”), were restructured to form three operating segments. These segments are Flowers Bakeries, Mrs. Smith’s Bakeries and Flowers Snack, LLC (“Flowers Snack”). Flowers Snack consists of the snack business previously operated by Mrs. Smith’s Bakeries. The three operating segments intend to share certain administrative services, and, as a result, the company eliminated approximately 70 positions and recorded a charge of $1.3 million during the second quarter of fiscal 2002. This charge consisted of $1.0 million in severance and $0.3 million in legal and other contract termination fees. Segment data prior to the third quarter of fiscal 2002 has been restated to reflect the restructuring.

     On March 26, 2001, Flowers Industries, Inc. (“FII”) completed a transaction that resulted in the spin-off of Flowers Foods and the merger of FII with a wholly owned subsidiary of the Kellogg Company (“Kellogg”). In the transaction, FII transferred the stock of its two wholly owned subsidiaries, Flowers Bakeries, Inc. and Mrs. Smith’s Bakeries, Inc. and all other assets and liabilities directly held by FII (except for its majority interest in Keebler Foods Company (“Keebler”) and certain debt, other liabilities and transaction costs) to Flowers Foods. FII distributed all of the outstanding shares of common stock of Flowers Foods to then existing FII shareholders such that FII shareholders received one share of Flowers Foods common stock for every five shares of FII they owned. FII, which consisted solely of its majority interest in Keebler and the aforementioned liabilities, was simultaneously merged with a wholly owned subsidiary of Kellogg. The cash purchase price paid by Kellogg, less the aforementioned liabilities and certain other transaction costs, resulted in net proceeds paid directly to FII shareholders of $1,241.6 million.

     In addition, in connection with the spin-off and merger transaction, various separation and other contractual payments under FII’s stock and incentive programs of $39.0 million were paid to executive and non-executive officers and employees. Of this amount, $5.7 million was accrued at March 26, 2001, and $5.3 million was amortized to earnings prior to March 26, 2001. Accordingly, in the first quarter of fiscal 2001, a charge of $28.0 million was recorded as an unusual charge to the company’s continuing operations, with a corresponding credit to capital in excess of par value, as a result of payments being settled from the proceeds of the spin-off and merger transaction.

     On March 26, 2001, the company completed a tender offer for the $200 million aggregate principal amount of 7.15% Debentures due 2028 (the “debentures”) and repurchased substantially all the debentures at a discount. Accordingly, in the first quarter of fiscal 2001, the company recorded an extraordinary gain of $5.0 million, net-of-tax, related to the early extinguishment of these debentures. The discount of $12.3 million was partially offset by $4.2 million in debt issuance costs and $3.1 million in taxes.

     On March 26, 2001, the company entered into a credit agreement that provided for total borrowings of up to $380.0 million, consisting of Term Loan A of $100.0 million, Term Loan B of $150.0 million and a revolving loan facility of $130.0 million. In December 2001, the company made a voluntary debt payment of $50.0 million that, in combination with contractually required debt reductions during fiscal 2001 of $10.8 million, resulted in a total permanent reduction of Term Loan A and Term Loan B borrowings of $58.0 million and $2.8 million, respectively. As a result of the voluntary debt payment, the company reduced its unamortized financing costs resulting in an early extinguishment of debt charge of $1.1 million, net of tax, which was recorded in the fourth quarter of fiscal 2001 as an extraordinary loss. Also on March 26, 2001, the company purchased the notes receivable (the “distributor notes”) from the independent distributors that had previously been owned by a third party financial institution and serviced by the company or a wholly owned subsidiary of the company. The principal balance of the distributor notes at that date was $77.6 million. In addition, in

14

fiscal 2001 the company purchased certain fixed assets which were previously leased under operating leases. The purchase of the debentures, distributor notes and fixed assets were financed from borrowings under the credit agreement discussed above.

     The company maintains insurance for property damage, mechanical breakdown, product liability, product contamination and business interruption applicable to its production facilities. During fiscal 1999, Mrs. Smith’s Bakeries incurred substantial costs related to mechanical breakdown and product contamination at certain plants. Mrs. Smith’s Bakeries filed claims under the company’s insurance policies for a portion of these costs that it believed to be insured. During fiscal 2000, Mrs. Smith’s Bakeries recovered net insurance proceeds of $17.2 million. During the first quarter of fiscal 2001, Mrs. Smith’s Bakeries received $6.8 million as partial payment on a final settlement of $7.5 million. The final $0.7 million payment was received in the second quarter of fiscal 2001.

     The company adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”) on December 30, 2001 (the first day of fiscal 2002). This standard provides accounting and disclosure guidance for acquired intangibles. Under this standard, goodwill and “indefinite-lived” intangibles are no longer amortized, but are tested at least annually for impairment. If the asset is determined to be impaired, an impairment loss would be recognized to reduce carrying value to fair value. Transitional impairment tests of goodwill and non-amortized intangibles are also performed upon adoption of SFAS No. 142, with any recognized impairment loss reported as the cumulative effect of an accounting change at the date of adoption.

     SFAS 142 requires that goodwill be tested annually for impairment using a two-step process. The first step is to identify a potential impairment and, in transition, this step must be measured as of the beginning of the fiscal year. The company has completed step one of the transitional impairment test as required. The results of the test performed in step one indicate an impairment of goodwill related to the Mrs. Smith’s division. Step two of the transitional impairment test is currently in process. The second step of the impairment test, which measures the amount of the impairment loss (measured as of the beginning of the fiscal year), if any, must be completed by the end of the company’s 2002 fiscal year. The company anticipates a goodwill impairment charge of $20 to $30 million to be recorded as of December 30, 2001 (the first day of fiscal 2002) as a cumulative effect of a change in accounting principle by the end of fiscal 2002. Further, management expects the adoption of SFAS 142 to reduce the company’s amortization expense for goodwill and other intangibles by approximately $4.0 million annually ($2.5 million, net of tax), beginning on December 30, 2001. Through the end of the third quarter of fiscal 2002, the company has reduced its amortization expense by $2.9 million as a result of the adoption of SFAS 142.

RESULTS OF OPERATIONS:

     Results of operations, expressed as a percentage of sales, for the twelve and forty week periods ended October 5, 2002 and October 6, 2001, are set forth below:

	FOR THE TWELVE WEEKS ENDED						FOR THE FORTY WEEKS ENDED
	OCTOBER 5, 2002			OCTOBER 6, 2001			OCTOBER 5, 2002			OCTOBER 6, 2001
				(UNAUDITED)
Sales		100.00	%		100.00	%		100.00	%		100.00	%
Gross margin		45.64	%		46.71	%		46.03	%		46.32	%
Selling, marketing and administrative expenses		36.60	%		38.03	%		38.16	%		38.98	%
Depreciation and amortization		4.65	%		4.49	%		4.60	%		4.61	%
Insurance proceeds		—			—			—			-0.61	%
Unusual charges		—			—			0.11	%		2.55	%
Interest, net		0.96	%		1.25	%		1.05	%		2.30	%
Income (loss) before income taxes and extraordinary gain		3.42	%		2.94	%		2.11	%		-1.50	%
Income tax expense (benefit)		1.32	%		0.75	%		0.81	%		-0.40	%
Net income (loss)		2.10	%		2.20	%		1.30	%		-0.70	%

CONSOLIDATED AND SEGMENT RESULTS

TWELVE WEEKS ENDED OCTOBER 5, 2002 COMPARED TO TWELVE WEEKS ENDED OCTOBER 6, 2001

     Sales. For the third quarter ended October 5, 2002, sales were $389.9 million, or 1.1% higher than sales in the comparable quarter of the prior year, which were $385.7 million.

15

     Flowers Bakeries’ sales for the third quarter of fiscal 2002 were $248.9 million, an increase of 1.0% from sales of $246.4 million reported for the third quarter of fiscal 2001. Flowers Bakeries sells its products through its direct-store-delivery (“DSD”) network of independent distributors. The company reports as its sales revenues for Flowers Bakeries the aggregate amounts paid by the ultimate retail or foodservice customer. The portions of such sales revenues that are retained by the distributors as discounts are recorded by the company as selling expenses. Total volume increases of 2.9% were partially offset by price decreases of 1.9%. The Kotarides acquisition, completed by the company during fiscal 2001, contributed 1% of the 2.9% increase in volume. Branded products distributed through the company’s DSD system to supermarkets, convenience stores, mass merchandisers and club stores represent approximately 66% of Flowers Bakeries’ sales. These sales, driven by the company’s Nature’s Own brand of soft variety breads, increased approximately 4.0% over the same period in the prior year. This increase is primarily attributable to increased volume. These volume increases were partially offset by decreases in prices and higher allowances that resulted from pricing pressures from competitors. Sales in the foodservice channel represent approximately 17% of Flowers Bakeries’ sales. These sales decreased approximately 4.4% from the same period in the prior fiscal year. This decrease was primarily due to product and customer mix changes and continues to reflect softer demand in this channel as a result of a weak economy. Store branded retail sales represent approximately 13% of Flowers Bakeries’ sales. These sales increased approximately 0.9% from the same period in the prior year.

     Mrs. Smith’s Bakeries’ sales for the third quarter of fiscal 2002 were $106.5 million, an increase of 0.9% from sales of $105.5 million reported during the third quarter of fiscal 2001. Branded products distributed frozen to supermarkets, convenience stores, mass merchandisers and club stores represent approximately 37% of Mrs. Smith’s Bakeries’ sales. These sales decreased approximately 9.2% over the same period in the prior year. This decrease was primarily a result of increased promotional activity (which reduces net sales) and delayed shipments due to a later Thanksgiving and reduced early buying programs by retailers. Sales to foodservice customers represent approximately 38% of Mrs. Smith’s Bakeries’ sales. Foodservice sales increased approximately 5.8% over the same period in the prior year. This increase was primarily the result of volume increases attributable to new and existing customers. Sales to in-store bakery customers represent approximately 22% of Mrs. Smith’s Bakeries’ sales. In-store bakery sales increased approximately 10.1% over the same period in the prior year. This increase was primarily attributable to volume increases related to increased sales to a national supermarket chain.

     Flowers Snack’s sales for the third quarter of fiscal 2002, were $34.5 million, an increase of 2.1% from its sales of $33.7 million for the third quarter of fiscal 2001. Branded sales distributed to supermarkets, convenience stores, mass merchandisers and club stores represents approximately 19% of Flowers Snack’s sales. These sales increased approximately 2.5% from the same period in the prior year primarily due to volume increases. Store branded retail sales represent approximately 12% of Flowers Snack’s sales. These sales were essentially flat year over year. Sales in the vending channel represent approximately 29% of Flowers Snack’s sales. These sales were also flat year over year. Sales to non-affiliated food companies under contract production arrangements represent approximately 40% of Flowers Snack’s sales. These sales increased by approximately 4.0% over the same period in the prior year. This increase was due to volume growth with existing customers and the addition of new customers as well as favorable pricing.

     Gross Margin. The company defines gross margin as net sales less materials, supplies, labor and other production costs. It also excludes depreciation, amortization and distributor discounts. Gross margin for the third quarter of fiscal 2002 was $177.9 million, or 1.3% lower than gross margin reported in the same period of the prior year of $180.2 million. As a percent of sales, gross margin decreased to 45.6% for the third quarter of fiscal 2002, as compared to 46.7% for the third quarter of fiscal 2001.

     Flowers Bakeries’ gross margin decreased to 56.8% of sales for the third quarter of fiscal 2002, compared to 57.5% of sales for the third quarter of fiscal 2001. This decrease can be attributed to higher ingredient and labor costs partially offset by lower utility and packaging costs. The increase in labor costs can primarily be attributed to increases in employee welfare benefit expenses.

     Mrs. Smith’s Bakeries’ gross margin decreased to 25.7% of sales for the third quarter of fiscal 2002, compared to 28.0% of sales for the third quarter of fiscal 2001. Improvements due to production efficiencies at the Suwanee, Georgia facility and favorable variances in overhead expenses were more than offset by the continued cost overruns at the Spartanburg, South Carolina facility. Additionally, lower net selling prices resulting from higher allowances and a shift in product mix adversely impacted the gross margin.

     Flowers Snack’s gross margin increased to 30.5% of sales for the third quarter of fiscal 2002, compared to 29.9% of sales for the third quarter of fiscal 2001. The improved margin was primarily attributable to increased sales as a result of both volume and price increases.

16

     Selling, Marketing and Administrative Expenses. During the third quarter of fiscal 2002, selling, marketing and administrative expenses were $142.7 million, or 36.6% of sales, as compared to $146.7 million, or 38.0% of sales reported for the third quarter of fiscal 2001.

     Flowers Bakeries’ selling, marketing and administrative expenses include discounts paid to the company’s independent distributors in its DSD system. Flowers Bakeries’ selling, marketing and administrative expenses were $110.8 million, or 44.5% of sales during the third quarter of fiscal 2002 as compared to $113.0 million, or 45.9% of sales during the third quarter of fiscal 2001. The decrease was primarily a result of decreases in labor expenses which were partially offset by increases in advertising expenses.

     Mrs. Smith’s Bakeries’ selling, marketing and administrative expenses were $22.0 million, or 20.6% of sales during the third quarter of fiscal 2002 as compared to $23.2 million, or 22.0% of sales during the third quarter of fiscal 2001. As a part of the company’s decision to reorganize its frozen dessert and fresh snack business, Mrs. Smith’s Bakeries was able to eliminate approximately 70 administrative positions during the second quarter of fiscal 2002. Management expects selling, marketing and administrative expenses to decrease further as a result of this restructuring.

     Flowers Snack’s selling, marketing and administrative expenses were $5.8 million, or 16.8% of sales during the third quarter of fiscal 2002 as compared to $6.4 million, or 18.9% of sales during the third quarter of fiscal 2001. The decrease was primarily attributable to the headcount reduction and shared administrative functions discussed above.

     Depreciation and Amortization. Depreciation and amortization expense was $18.1 million for the third quarter of fiscal 2002, an increase of 4.7% from the same period in the prior year, which was $17.3 million.

     Flowers Bakeries’ depreciation and amortization expense decreased to $10.5 million for the third quarter of fiscal 2002 from $11.0 million in the third quarter of fiscal 2001. The decrease was primarily attributable to a decrease in amortization expense of $0.5 million as a result of the implementation of SFAS 142.

     Mrs. Smith’s Bakeries’ depreciation and amortization expense for the third quarter of fiscal 2002 was $6.4 million as compared to $5.4 million in the third quarter of fiscal 2001. An increase in depreciation expense as a result of capital expenditures was somewhat offset by a decrease in amortization expense of $0.4 million as a result of the implementation of SFAS 142.

     Flowers Snack’s depreciation and amortization expense increased to $1.2 million for the third quarter of fiscal 2002 from $0.9 million in the third quarter of fiscal 2001. The increase in depreciation expense was a result of capital expenditures.

     Interest Expense. For the third quarter of fiscal 2002, net interest expense was $3.7 million, a decrease of $1.1 million from the same period in the prior year, which was $4.8 million. The decrease was primarily related to a reduction in debt that resulted from a voluntary debt payment of $50.0 million made in the fourth quarter of fiscal 2001. This decrease was partially offset by a $0.2 million accrual of interest related to the Trans American Brokerage, Inc. vs. Mrs. Smith’s Bakeries, Inc. arbitration discussed below in Part II — Item 1: Legal Proceedings.

     Income Before Income Taxes. Income before income taxes and extraordinary gain for the third quarter of fiscal 2002 was $13.3 million, an improvement of $1.9 million from the $11.4 million reported in the third quarter of fiscal 2001.

     The increase was primarily a result of improvements in the operating results of Flowers Bakeries and Flowers Snack of $2.5 million and $0.7 million, respectively. Contributing to the increase was a decrease in interest expense of $1.1 million as a result of the voluntary debt payment discussed above. Partially offsetting these positive items was an increase in Mrs. Smith’s Bakeries’ operating loss of $2.0 million and an increase in unallocated corporate expenses of $0.4 million in the most recent quarter.

     Income Taxes. The income tax expense during the third quarter of fiscal 2002 was provided for at an estimated effective rate of 38.5%. The effective rate differs from the statutory rate primarily due to state income taxes.

17

FORTY WEEKS ENDED OCTOBER 5, 2002 COMPARED TO FORTY WEEKS ENDED OCTOBER 6, 2001

     Sales. For the forty weeks ended October 5, 2002, sales were $1,231.8 million, or 1.0% higher than sales in the comparable period of the prior year, which were $1,220.2 million.

     Flowers Bakeries’ sales for the forty weeks ended October 5, 2002, were $822.4 million, an increase of 0.5% from sales of $818.5 million reported for the same period in the prior year. Flowers Bakeries sells its products through its DSD network of independent distributors. The company reports as its sales revenues for Flowers Bakeries the aggregate amounts paid by the ultimate retail or food service customer. The portions of such sales revenues that are retained by the distributors as discounts are recorded by the company as selling expenses. Total volume increases of 1.4% were partially offset by price decreases of 0.9%. The Kotarides acquisition, completed by the company during fiscal 2001, contributed 1.3% of the 1.4% increase in volume. Branded products distributed through the company’s DSD system to supermarkets, convenience stores, mass merchandisers and club stores represent approximately 65% of Flowers Bakeries’ sales. These sales, driven by the company’s Natures Own brand of soft variety breads, increased approximately 2.8% over the same period in the prior year. Sales in the foodservice channel represent approximately 17% of Flowers Bakeries’ sales. These sales decreased approximately 3.4% from the same period in the prior year. This decrease was primarily due to decreased volume and product and customer mix changes. Store branded retail sales represent approximately 13% of Flowers Bakeries’ sales. These sales decreased approximately 0.5% from the same period in the prior year primarily as a result of price decreases.

     Mrs. Smith’s Bakeries’ sales for the forty weeks ended October 5, 2002 were $292.4 million, an increase of 3.5% from sales of $282.6 million reported during the same period in the prior year. Branded products distributed frozen to supermarkets, convenience stores, mass merchandisers and club stores represent approximately 32% of Mrs. Smith’s Bakeries’ sales. These sales decreased approximately 7.7% from the same period in the prior year. This decrease was primarily a result of increased promotional activity and shipments delayed until the fourth quarter due to a later Thanksgiving and lower early buying programs by retailers. In addition, product cuts made to customer orders due to production equipment start up issues at the Spartanburg, South Carolina facility during the first quarter of fiscal 2002 contributed to the decrease. The start up issues were a result of the closing of the Pembroke, North Carolina facility and the resulting shift of production to Spartanburg. Although the company built up finished-goods inventory in anticipation of this move, the company did not have sufficient inventory of the right product at the right time to fully fill orders. Sales to foodservice customers represent approximately 44% of Mrs. Smith’s Bakeries’ sales. Foodservice sales increased approximately 9.2% over the same period in the prior year. This increase was primarily attributable to sales related to a contract with a national fast food restaurant to supply buns related to a special promotional product. There is no guarantee that sales of this promotional product will continue. Sales to in-store bakery customers represent approximately 23% of Mrs. Smith’s Bakeries’ sales. In-store bakery sales increased approximately 9.5% over the same period in the prior year. This increase is primarily attributable to volume related to increased sales to a national supermarket chain.

     Flowers Snack’s sales for the forty weeks ended October 5, 2002, were $117.0 million, a decrease of 1.7% from sales of $119.1 million reported for the same period in the prior year. Branded sales distributed to supermarkets, convenience stores, mass merchandisers and club stores represent approximately 19% of Flowers Snack’s sales. These sales increased approximately 4.5% from the same period in the prior year. The increase was primarily due to volume. Store branded retail sales represent approximately 12% of Flowers Snack’s sales. These sales decreased 3.2% from the same period in the prior year. The decrease was primarily due to a decrease in volume. Sales in the vending channel represent approximately 28% of Flowers Snack’s sales. These sales decreased 5.7% from the same period in the prior year. This decrease was primarily due to a general softness in the channel as a result of a weak economy. Sales to non-affiliated food companies under contract production arrangements represent approximately 42% of Flowers Snack’s sales. These sales decreased by approximately 1.2% over the same period in the prior year. This decrease was primarily due to decreases in volume.

     Gross Margin. The company defines gross margin as net sales less materials, supplies, labor and other production costs. It also excludes depreciation, amortization and distributor discounts. Gross margin for the forty weeks ended October 5, 2002, was $566.9 million, or 0.3% higher than gross margin reported for the same period of the prior year of $565.2 million. As a percent of sales, gross margin decreased to 46.0% from 46.3% reported for the forty weeks ended October 6, 2001.

     Flowers Bakeries’ gross margin increased to 57.2% of sales for the forty weeks ended October 5, 2002, compared to 56.5% of sales for the same period in the prior year. This increase can be attributed to lower utility and packaging costs as well as a more favorable product mix. Additionally, there were reductions in lease costs due to the buyout of certain leases as a part of the spin-off and merger transaction. These improvements were partially offset by higher ingredient and labor costs. The increase in labor costs can primarily be attributed to increases in welfare benefit expenses.

     Mrs. Smith’s Bakeries’ gross margin decreased to 22.0% of sales for the forty weeks ended October 5, 2002, compared to 24.4% of sales for the same period in the prior year. Improvements due to increased production in the Suwanee facility and favorable variances

18

in overhead expenses were more than offset by the continued cost overruns at Spartanburg mentioned above. Additionally, a lower net selling price resulting from higher allowances and a shift in product mix also adversely impacted the gross margin.

     Flowers Snack’s gross margin decreased to 30.4% of sales for the forty weeks ended October 5, 2002, compared to 33.2% of sales for the same period in the prior year. This decrease was primarily related to higher ingredient and labor costs.

     Selling, Marketing and Administrative Expenses. For the forty weeks ended October 5, 2002, selling, marketing and administrative expenses were $470.1 million, or 38.2% of sales as compared to $475.6 million, or 39.0% of sales reported for the forty weeks ended October 6, 2001.

     Flowers Bakeries’ selling, marketing and administrative expenses include discounts paid to the company’s independent distributors in its DSD system. Flowers Bakeries’ selling, marketing and administrative expenses were $364.7 million, or 44.4% of sales during the forty weeks ended October 5, 2002 as compared to $370.0 million, or 45.2% of sales during the same period in the prior year. The decrease was comprised of decreases in labor and utility expenses. In addition, Flowers Bakeries’ administrative expenses have decreased as a result of the continued consolidation of accounts payable and accounts receivable functions to a shared services processing center. These decreases were partially offset by increases in advertising and thrift store discounts.

     Mrs. Smith’s Bakeries’ selling, marketing and administrative expenses were $68.3 million, or 23.4% of sales during the forty weeks ended October 5, 2002 as compared to $68.1 million, or 24.1% of sales during the same period in the prior year. As a part of the company’s decision to restructure its segments, Mrs. Smith’s Bakeries eliminated approximately seventy administrative positions during the second quarter of fiscal 2002. Management expects selling, marketing and administrative expenses to continue to decrease going forward as a result of this restructuring.

     Flowers Snack’s selling, marketing and administrative expenses were $22.3 million, or 19.1% of sales during the forty weeks ended October 5, 2002 as compared to $23.6 million, or 19.8% of sales during the same period in the prior year. This decrease was primarily attributable to lower administrative expenses resulting from the headcount reduction and shared administrative functions discussed above.

     Depreciation and Amortization. Depreciation and amortization expense was $56.7 million for the forty weeks ended October 5, 2002, an increase of 0.7% from the same period in the prior year, which was $56.3 million.

     Flowers Bakeries’ depreciation and amortization expense decreased to $34.7 million for the forty weeks ended October 5, 2002 from $35.7 million in the same period in the prior year. The decrease was primarily attributable to a decrease in amortization expense of $1.5 million as a result of the implementation of SFAS 142. Partially offsetting this decrease was the depreciation of assets purchased that were leased in the prior year as well as depreciation on capital projects put in service in the current year.

     Mrs. Smith’s Bakeries’ depreciation and amortization expense for the forty weeks ended October 5, 2002 was $17.4 million as compared to $16.7 million in the same period in the prior year. An increase in depreciation expense, primarily as a result of an increase in capital expenditures and the purchase of assets that were leased in the prior year, was partially offset by a decrease in amortization expense of $1.4 million as a result of the implementation of SFAS 142.

     Flowers Snack’s depreciation and amortization expense increased to $4.4 million for the forty weeks ended October 5, 2002 from $3.7 million in the same period in the prior year. The increase in depreciation expense was a result of capital expenditures.

     Proceeds From Insurance Policies. The company maintains insurance for property damage, mechanical breakdown, product liability, product contamination and business interruption applicable to its production facilities. During fiscal 1999, Mrs. Smith’s Bakeries incurred substantial costs related to mechanical breakdown and product contamination at certain plants. Mrs. Smith’s Bakeries filed claims under the company’s insurance policies for a portion of these costs that it believed to be insured. During the first half of fiscal 2002, the company received a final settlement of $7.5 million.

     Unusual Charges. On May 31, 2002, the company announced that, effective July 14, 2002 (the first day of the third quarter of fiscal 2002), its two operating segments, Flowers Bakeries and Mrs. Smith’s Bakeries, would be restructured to form three operating segments. These segments are Flowers Bakeries, Mrs. Smith’s Bakeries and Flowers Snack. Flowers Snack consists of the snack business previously operated by Mrs. Smith’s Bakeries. The three operating segments share administrative services, and, as a result, the company eliminated approximately 70 positions and recorded a charge of $1.3 million during the second quarter of fiscal 2002. This charge consisted of $1.0 million in severance and $0.3 million in legal and other contract termination fees.

19

     During the first quarter of fiscal 2001, in connection with the spin-off and merger transaction, various separation and other contractual payments under FII’s stock and incentive programs of $39.0 million were paid to executive and non-executive officers and employees. Of this amount, $11.0 million had already been expensed as of December 30, 2000. Accordingly, a charge of $28.0 million was recorded in the company’s continuing operations in the first quarter of 2001.

     Interest Expense. For the forty weeks ended October 5, 2002, net interest expense was $12.9 million, a decrease of $15.1 million from the same period in the prior year, which was $28.0 million. The decrease was primarily related to a reduction in debt that resulted from the spin-off and merger transaction. In addition, the company made a voluntary debt payment of $50.0 million in the fourth quarter of fiscal 2001, resulting in decreased interest expense. This decrease in interest was partially offset by a $0.6 million accrual of interest related to the Trans American Brokerage, Inc. vs. Mrs. Smith’s Bakeries, Inc. arbitration discussed below in Part II-Item 1: Legal Proceedings.

     Income (Loss) Before Income Taxes and Extraordinary Gain. Income before income taxes and extraordinary gain for the forty weeks ended October 5, 2002 was $26.0 million, an improvement of $44.3 million from the $18.3 million loss reported for the same period of the prior year.

     The improvement was primarily a result of a decrease in unusual charges of $29.8 million. In addition there were significant improvements in the operating results of Flowers Bakeries of $14.1 million and a decrease in interest expense of $15.1 million as a result of the decrease in debt resulting from the spin-off and merger transaction and voluntary debt payment discussed above. Also, other operating losses decreased by $1.6 million, primarily as a result of decreased hedging losses. Partially offsetting these positive items was an increase in Mrs. Smith’s Bakeries’ operating loss of $5.4 million, a decrease in Flowers Snack’s operating income of $3.4 million and a decrease in insurance proceeds of $7.5 million.

     Extraordinary Gain on the Early Extinguishment of Debt. On March 26, 2001, the company completed a tender offer for the $200 million aggregate principal amount of the debentures and repurchased substantially all the debentures at a discount. Accordingly, the company recorded an extraordinary gain of approximately $5.0 million, net of tax, related to the early extinguishment of these debentures in the first quarter of fiscal 2001. The discount of $12.3 million was partially offset by the write-off of $4.2 million in debt issuance costs and $3.1 million in taxes.

     Income Taxes. Income tax expense for the forty weeks ended October 5, 2002, was provided for at an estimated effective rate of 38.5%. The effective rate differs from the statutory rate primarily due to state income taxes.

LIQUIDITY AND CAPITAL RESOURCES:

     Flowers Foods’ cash and cash equivalents decreased to $5.5 million at October 5, 2002 from $12.3 million at December 29, 2001. The decrease resulted primarily from $36.5 million and $14.5 million disbursed for investing activities and financing activities, respectively, offset in part by $44.3 million provided by operating activities.

     Net cash of $44.3 million received from operating activities consisted primarily of $16.0 million in net income, adjusted for certain non-cash items of $76.0 million. These positive items were partially offset by cash disbursed for working capital and other activities of $47.7 million. Net cash disbursed for working capital and other activities resulted from an increase in inventories and accounts receivable of $33.1 million and $27.2 million, respectively. The increase in inventory can primarily be attributed to the ramp up in production for Mrs. Smith’s Bakeries’ holiday pie season which began in the third quarter. The increase in accounts receivable can be attributed to Mrs. Smith’s Bakeries’ shipment of product for the holiday season.

     Net cash disbursed for investing activities during the forty weeks ended October 5, 2002, of $36.5 million included capital expenditures of $39.5 million. Capital expenditures at Flowers Bakeries, Mrs. Smith’s Bakeries and Flowers Snack were $19.8 million, $17.1 million and $2.3 million, respectively.

     Net cash disbursed for financing activities of $14.5 million consisted primarily of payments on debt and capital lease obligations.

     Loans under the credit agreement discussed in Note 8 are collateralized by substantially all of the assets of the company, excluding real property. The credit agreement includes certain restrictions, which, among other things, require maintenance of financial covenants, restrict encumbrance of assets and creation of indebtedness and limit capital expenditures, purchases of common shares and dividends that can be paid. Restrictive financial covenants include such ratios as a consolidated interest coverage ratio, a consolidated fixed charge coverage ratio and a maximum leverage ratio. Annual capital expenditures are restricted between $50.0 million and $57.5 million during the periods beginning in fiscal 2001 and ending with fiscal 2005.

20

Commencing in fiscal 2002, cash dividends cannot exceed $5.0 million unless certain conditions are met. As of October 5, 2002, the company was in compliance with all covenants and believes that, given its current cash position, its cash flow from operating activities and its available credit facilities, it can continue to comply with the current terms of its credit facilities and can meet presently foreseeable financial requirements.

     The company’s credit rating by Moody’s as of October 5, 2002 was Ba2. The company’s credit rating by Standard and Poor’s as of October 5, 2002 was BBB-. The company’s credit rating by Fitch as of October 5, 2002 was BB+. Changes in the company’s credit ratings do not trigger a change in the company’s available borrowings or costs under the credit agreement discussed above, but could effect future credit availability.

     At October 5, 2002 and October 6, 2001, the company did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

NEW ACCOUNTING PRONOUNCEMENTS:

     In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 143, “Accounting for Asset Retirement Obligations,” which addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement will be effective for the company beginning in the first quarter of fiscal 2003. Management does not expect the adoption of this statement to have a material impact on the company’s results of operations or financial position.

     In October 2001, the FASB issued SFAS No. 144 (“SFAS 144”), “Accounting for Impairment or Disposal of Long-lived Assets,” which supercedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of” and the accounting and reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions” for the disposal of a segment of a business. SFAS 144 clarifies and revises existing guidance on accounting for impairment of plant, property, and equipment, amortizable intangibles and other long-lived assets not specifically addressed in other accounting literature. SFAS 144 also broadens the presentation of discontinued operations to include a component of an entity rather than only a segment of a business. The company adopted this statement on December 30, 2001 (the first day of fiscal 2002) on a prospective basis.

     In April 2002, the FASB issued SFAS No. 145 (“SFAS 145”), “Rescission of SFAS Nos. 4, 44, and 64, Amendment of SFAS 13, and Technical Corrections as of April 2002.” This statement rescinds SFAS No. 4, “Reporting Gains and Losses from Extinguishment of Debt,” and an amendment of that Statement, SFAS No. 64, “Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.” This Statement also rescinds SFAS No. 44, “Accounting for Intangible Assets of Motor Carriers.” In addition, this Statement amends SFAS No. 13, “Accounting for Leases,” to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. SFAS 145 will be effective for fiscal 2003, which begins on December 29, 2002. Management does not expect the adoption of this statement to have a material impact on the company’s results of operations or financial position.

     In July 2002, the FASB issued SFAS No. 146 (“SFAS 146”), “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS No. 146 addresses the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, including costs related to terminating a contract that is not a capital lease and termination benefits that employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation contract. SFAS 146 supersedes EITF Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred in a Restructuring),” which recognizes certain exit costs when management commits to a plan and requires liabilities associated with exit and disposal activities to be expensed as incurred. SFAS 146 will be effective for exit or disposal activities of the company that are initiated on or after December 29, 2002 (the first day of fiscal 2003).

FORWARD-LOOKING STATEMENTS:

     Statements contained in this filing, including, without limitation, Part II-Item 1: Legal Proceedings, and certain other written or oral statements made from time to time by the company and its representatives that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to current expectations regarding our future financial condition and results of operations and are often identified by the use of words and phrases

21

such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “would,” “is likely to,” “is expected to” or “will continue,” or the negative of these terms or other comparable terminology.

     Forward-looking statements are based on current information, and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected. Certain factors that may cause actual results to differ materially from those projected are discussed in this report and may include, but are not limited to:

• unexpected changes in any of the following: (i) general economic and business conditions; (ii) the competitive setting in which we operate, including changes in pricing, advertising or promotional strategies by us or our competitors, as well as changes in consumer demand; (iii) interest rates and other terms available to us on our borrowings; (iv) energy and raw materials costs and availability; (v) relationships with our employees and independent distributors; and (vi) laws and regulations (including health-related issues), accounting standards or tax rates in the markets in which we operate;

• our ability to execute our business strategy, which may involve integration of recent acquisitions or the acquisition or disposition of assets at presently targeted values;

• our ability to operate existing, and any new, manufacturing lines according to schedule;

• the level of success we achieve in developing and introducing new products and entering new markets;

• the credit and business risks associated with our customers which operate in the highly competitive retail food industry, including the amount of consolidation in that industry; and

• any business disruptions due to political instability, armed hostilities, incidents of terrorism or the responses to or repercussions from any of these or similar events or conditions.

     The foregoing list of important factors does not include all such factors nor necessarily present them in order of importance. You should consult our Annual Report on Form 10-K for the fiscal year ended December 29, 2001 and other disclosures made by the company (such as in our other filings with the Securities and Exchange Commission or in company press releases) for other factors that may cause actual results to differ materially from those projected by the company.

     We caution you not to place undue reliance on forward-looking statements, as they speak only as of the date made and are inherently uncertain. The company undertakes no obligation to publicly revise or update such statements, except as required by law. You are advised, however, to consult any further public disclosures by the company (such as in our filings with the Securities and Exchange Commission or in company press releases) on related subjects.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:

     The company uses derivative financial instruments as part of an overall strategy to manage market risk. The company uses forward, futures, swap and option contracts to hedge existing or future exposure to changes in interest rates and commodity prices. The company does not enter into these derivative financial instruments for trading or speculative purposes. If actual market conditions are less favorable than those anticipated, raw material prices could increase significantly, adversely affecting the margins from the sale of our products.

COMMODITY PRICE RISK

     The company enters into commodity forward, futures and option contracts and swap agreements for wheat and, to a lesser extent, other commodities in an effort to provide a predictable and consistent commodity price and thereby reduce the impact of volatility in its raw material and packaging prices. At October 5, 2002, the fair market value of the company’s commodity derivative portfolio was $3.8 million. Of this fair value, $0.6 million is based on quoted market prices and $3.2 million is based on models and other valuation methods. Additionally, of this fair value, $0.8 million, $2.3 million and $0.7 million, relate to instruments that will be utilized in fiscal 2002, 2003 and 2004, respectively. A sensitivity analysis has been prepared to estimate the company’s exposure to commodity price risk. Based on the company’s derivative portfolio as of October 5, 2002, a hypothetical ten percent adverse change in commodity prices under normal market conditions could potentially have a $(0.8) million effect on the fair value of the derivative portfolio. The analysis disregards changes in the exposures inherent in the underlying hedged item; however, the company expects that any loss in fair value of the portfolio would be substantially offset by reductions in raw material and packaging prices.

INTEREST RATE RISK

     The company enters into interest rate swap agreements in order to reduce its overall interest rate risk. At October 5, 2002, the fair market value of the company’s interest rate swap was a liability of $(5.7) million. The fair value of the swap is based on a valuation model using quoted market prices. The swap agreement expires in December 2003. A sensitivity analysis has been prepared to estimate the company’s exposure to interest rate risk. Assuming a 10% increase in interest rate, the fair value of the company’s interest rate swap agreement at October 5, 2002, with a notional amount of $150.0 million, would increase by $0.3 million. A 10% decrease in interest rate would reduce the fair value by $0.3 million.

22

     Based on the company’s floating rate debt at October 5, 2002, including the effect of the interest rate swap agreement, assuming a 10% increase in interest rates, the company’s interest expense would increase by $0.2 million, while the impact of a 10% decrease in interest rates would reduce interest expense by $0.2 million.

     In June 1998, the FASB issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” The standard, as amended by SFAS No. 137, “Accounting for Derivative Instruments and Hedging Activities Deferral of the Effective Date of SFAS No. 133, an amendment of SFAS No. 133,” and SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities, an amendment of SFAS No. 133” (referred to hereafter as “SFAS 133”), was adopted by the company on December 31, 2000 (the first day of fiscal 2001).

     In accordance with SFAS 133, all derivatives are recognized on the Consolidated Balance Sheet in current or other assets or other accrued liabilities or other liabilities at their fair value. On the date the company enters into a derivative contract, it designates the derivative as (1) a hedge of the fair value of (a) a recognized asset or liability or (b) an unrecognized firm commitment (a “fair value” hedge) or (2) a hedge of the variability of cash flows that are to be received or paid in connection with (a) a forecasted transaction or (b) a recognized asset or liability (a “cash flow” hedge). Changes in the fair value of a derivative that is highly effective as, and that is designated and qualifies as, a fair-value hedge, along with changes in the fair value of the hedged asset or liability that are attributable to the hedged risk (including changes that reflect losses or gains on firm commitments), are recorded in current-period earnings. Changes in the fair value of a derivative that is highly effective as, and that is designated and qualifies as, a cash-flow hedge, to the extent that the hedge is effective, are recorded in other comprehensive income, until earnings are affected by the variability of cash flows of the hedged transaction (e.g., until periodic settlements of a variable-rate asset or liability are recorded in earnings or when the underlying commodity being hedged is used in production and recorded to earnings). Any hedge ineffectiveness (which represents the amount by which the changes in the fair value of the derivative exceeds the variability in the cash flows of the forecasted transaction) is recorded in current-period earnings in selling, marketing and administrative expenses. Changes in the fair value of derivative instruments that do not qualify for hedge accounting are also reported in current-period earnings in selling, marketing and administrative expenses.

     While SFAS 133 provides a significant change in the accounting guidance related to derivative instruments and hedging activities, the company has determined that the more stringent accounting and documentation requirements under SFAS 133 do not cause any significant changes in its overall risk management strategy and in its overall hedging activities.

     The cash effects of the company’s commodity derivatives and interest rate swap are included in the Consolidated Statement of Cash Flows as cash flow from operating activities.

ITEM 4. CONTROLS AND PROCEDURES

     The company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Within the 90-day period prior to the filing of this quarterly report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the company’s disclosure controls and procedures are effective.

     Subsequent to the date of their evaluation, there have been no significant changes in the company’s internal controls or in other factors that could significantly affect these controls.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     The company and its subsidiaries from time to time are parties to, or targets of, lawsuits, claims, investigations and proceedings, including personal injury, commercial, contract, environmental, antitrust, product liability, health and safety and employment matters, which are being handled and defended in the ordinary course of business. While the company is unable to predict the outcome of these matters, it does not believe, based upon currently available facts, that the ultimate resolution of any such pending matters, including

23

the Trans American Brokerage litigation described below, will have a material adverse effect on its overall financial condition, results of operations or cash flows in the future. However, adverse developments could negatively impact earnings in a particular future fiscal period.

     On March 25, 2002, in Trans American Brokerage, Inc. vs. Mrs. Smith’s Bakeries, Inc., an arbitration brought before the American Arbitration Association, an arbitrator found against Mrs. Smith’s Bakeries and issued an interim award for damages. In the dispute, the claimant alleges breach of a sales brokerage agreement by Mrs. Smith’s Bakeries and seeks lost profits as well as attorneys’ fees and costs. As a result of the award, the company recorded a $10.0 million charge ($6.2 million after tax) to its results for the fiscal year ended December 29, 2001 as required by Generally Accepted Accounting Principles. The charge represents the company’s estimate of the total costs (including attorney’s fees and expenses) which it could incur in connection with this dispute. The provisions of this award also provide for the accrual of post-petition interest until such award is settled or paid. During the forty weeks ended October 5, 2002, the company recorded $0.6 million in interest expense related to this award.

     On April 23, 2002, the company filed a Motion for Reconsideration on the issue of damages. That Motion was denied, and a Final Award was entered on June 11, 2002. On June 26, 2002, the company filed a Motion to Vacate the Final Award in the United States District Court for the Eastern District of Pennsylvania. On July 17, 2002, Trans American Brokerage, Inc. filed a Petition to Confirm Arbitration Award and Enforce Judgment in the same Court. Both the Motion to Vacate and the Petition have been fully briefed, and the parties are waiting for a decision from the Court.

     The company maintains a network of independent distributors to operate a direct-store-delivery (“DSD”) system-to distribute substantially all of Flowers Bakeries’ products. The company enters into contractual arrangements with its distributors providing for the purchase (and repurchase, under certain circumstances) of territories, financing arrangements, standards of performance by the distributors and discount structure. From time to time, the company has disputes with distributors or former distributors in the ordinary course of business, generally involving contract claims. The company believes that its independent distributor program is a key competitive advantage, assuring that its products are properly and efficiently made available to its retail and foodservice customers. While there can be no assurance that any future disputes would not have a material adverse impact on the results of operations or financial condition of the company, the company believes that its current contracts with its distributors provide the company with effective means for resolving any disputes.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None

ITEM 5. OTHER INFORMATION

     On November 18, 2002, Flowers Foods reached an agreement with Kellogg Company to acquire all the assets of Bishop Baking Company, Inc. in Cleveland, Tennessee. Terms of the agreement have not been disclosed. The transaction is expected to be completed in early January 2003. Bishop Baking Company, with annual sales of approximately $30 million, operates one bakery in Cleveland, Tennessee. Bishop’s products, which include a line of fresh snack cake items, are distributed nationwide.

     On November 15, 2002, the board of directors of Flowers Foods declared a dividend of $.05 per share on the company’s common stock payable on December 13, 2002, to shareholders of record on November 29, 2002.

     On November 15, 2002, the board of directors of Flowers Foods approved an amendment to the company’s shareholder rights plan allowing certain investors, including existing investors and qualified institutional investors, to beneficially own up to 20% of the company’s outstanding common stock. Previously, the rights agreement limited all shareholders to less than 15% of the outstanding shares.

     On October 25, 2002, Flowers Foods announced it had acquired Ideal Baking Company, Inc., in Batesville, Arkansas for a purchase price which included cash, shares of Flowers Foods common stock, and the assumption of debt. Ideal Baking Company, which had annual sales of approximately $15 million in 2001, employs 280 people and operates approximately 75 bakery routes from its Batesville, Arkansas bakery that serve customers in northern Arkansas, southern Missouri and Memphis, Tennessee.

     Effective July 14, 2002 (the first day of the third quarter of fiscal year 2002), the company’s two operating segments, Flowers Bakeries and Mrs. Smith’s Bakeries, were restructured to form three operating segments. These segments are Flowers Bakeries, Mrs. Smith’s Bakeries and Flowers Snack. Flowers Snack consists of the snack cake business previously operated by Mrs. Smith’s Bakeries. The three operating segments share administrative services, and each segment president reports directly to the President and Chief Operating Officer of Flowers Foods.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits filed as part of this report are listed in the Exhibit Index attached hereto.

     (b)  Reports on Form 8-K.

            A form 8-K was filed by the company on August 27, 2002, under Item 9, attaching copies of sworn statements submitted to the Securities and Exchange Commission (“SEC”) by Principal Executive Officer, Amos R. McMullian, and Principal Financial Officer, Jimmy M. Woodward, of Flowers Foods, Inc. pursuant to SEC Order No. 4-460.

24

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FLOWERS FOODS, INC
By: /s/ Amos R. McMullian
Name: Amos R. McMullian
Title: Chairman of the Board and
Chief Executive Officer

By: /s/ Jimmy M. Woodward
Name: Jimmy M. Woodward
Title: Senior Vice President and
Chief Financial Officer

Date: November 19, 2002

25

CERTIFICATIONS

I, Amos R. McMullian, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Flowers Foods, Inc.;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 19, 2002 /s/ Amos R. McMullian
Amos R. McMullian
Chairman of the Board and Chief Executive Officer

26

CERTIFICATIONS

I, Jimmy M. Woodward, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Flowers Foods, Inc.;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 19, 2002 /s/ Jimmy M. Woodward
Jimmy M. Woodward
Senior Vice President and Chief Financial Officer

27

EXHIBIT INDEX

Exhibit
No.			Name of Exhibit
	2.1	-	Distribution Agreement by and between Flowers Industries, Inc. and Flowers Foods, Inc., dated as of October 26, 2000 (Incorporated by reference to Flowers Foods’ Registration Statement on Form 10, dated February 9, 2001, File No. 1-16247).
	2.2	-	Amendment No. 1 to Distribution Agreement, dated as of March 12, 2001, between Flowers Industries, Inc. and Flowers Foods, Inc. (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 30, 2001, File No. 1-16247).
	3.1	-	Restated Articles of Incorporation of Flowers Foods, Inc. (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 30, 2001, File No. 1-16247).
	*3.2	-	Amended and Restated Bylaws of Flowers Foods, Inc.
	4.1	-	Share Certificate of Common Stock of Flowers Foods, Inc. (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 30, 2001, File No. 1-16247).
	4.2	-	Rights Agreement between Flowers Foods, Inc. and First Union National Bank, as Rights Agent, dated March 23, 2001 (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 30, 2001, File No. 1-16247).
	4.3	-	Amendment No. 1, dated November 15, 2002, to Rights Agreement between Flowers Foods, Inc. and Wachovia Bank, N.A. (as successor in interest to First Union National Bank), as rights agent, dated March 23, 2001. (Incorporated by reference to Flowers Foods’ Registration Statement on Form 8-A, dated November 18, 2002, File No. 1-16247).
	10.1	-	Employee Benefits Agreement by and between Flowers Industries, Inc. and Flowers Foods, Inc., dated as of October 26, 2000 (Incorporated by reference to Flowers Foods’ Registration Statement on Form 10, dated February 9, 2001, File No. 1-16247).
	10.2	-	First Amendment to Employee Benefits Agreement by and between Flowers Industries, Inc. and Flowers Foods, Inc., dated as of February 6, 2001 (Incorporated by reference to Flowers Foods’ Registration Statement on Form 10, dated February 9, 2001, File No. 1-16247).
	10.3	-	Flowers Foods, Inc. Retirement Plan No. 1 (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 30, 2001, File No. 1-16247).
	10.4	-	Flowers Foods, Inc. 2001 Equity and Performance Incentive Plan (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 30, 2001, File No. 1-16247).
	10.5	-	Credit Agreement, dated as of March 26, 2001, among Flowers Foods, Inc., the Lenders party thereto from time to time, SunTrust Bank, as Syndication Agent and Bankers Trust Company, as Administrative Agent (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 30, 2001, File No. 1-16247).
	10.6	-	Debenture Tender Agreement, dated as of March 12, 2001, by and among Flowers Industries, Inc., Flowers Foods, Inc. and the Holders (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 30, 2001, File No. 1-16247).
	10.7	-	Employment Agreement, effective as of December 31, 2001, by and between Flowers Foods, Inc. and G. Anthony Campbell. (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 27, 2002, File No. 1-6247).
	10.8	-	Flowers Foods, Inc. Stock Appreciation Rights Plan. (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 27, 2002, File No. 1-6247).
	10.9	-	Flowers Foods, Inc. Annual Executive Bonus Plan. (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 27, 2002, File No. 1-6247).

28

Exhibit
No.			Name of Exhibit
	10.10	-	Flowers Foods, Inc. Supplemental Executive Retirement Plan. (Incorporated by reference to Flowers Foods’ Annual Report on Form 10-K, dated March 27, 2002, File No. 1-6247).
	*21	-	Subsidiaries of Flowers Foods, Inc.
	*99	-	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Amos R. McMullian, Chief Executive Officer, and Jimmy M. Woodward, Chief Financial Officer, for the Quarter Ended October 5, 2002.

* Filed herewith

29 EX-3.2 3 g79414exv3w2.txt EX-3.2 AMENDED AND RESTATED BYLAWS EXHIBIT 3.2 AMENDED AND RESTATED BYLAWS OF FLOWERS FOODS, INC. ARTICLE 1. OFFICES Flowers Foods, Inc. (the "Corporation") shall maintain at all times a registered office in the State of Georgia and a registered agent at that address, but may have other offices located within or without the State of Georgia as the Board of Directors may determine. ARTICLE 2. MEETINGS OF SHAREHOLDERS 2.1 Place and Time of Meetings. All meetings of the shareholders shall be held at such time and at such place, within or without the State of Georgia, as may be designated by the Board of Directors or, in the absence of a designation by the Board of Directors, by the Chairman of the Board of Directors, the President or the Secretary, and stated in the notice of the meeting. The Chairman of the Board of Directors may postpone and reschedule any previously scheduled annual or special meeting of the shareholders of the Corporation. 2.2 Annual Meeting. An annual meeting of the shareholders shall be held at such date, time and place as shall be designated from time to time by the Board of Directors, at which meeting the shareholders shall elect by a plurality vote the Directors to succeed those whose terms expire and shall transact such other business as may be properly brought before the meeting in accordance with Section 2.10 of these Bylaws. 2.3 Special Meetings. Special meetings of the shareholders may be called only as provided in this Section 2.3. Special meetings may be called by the Chairman of the Board of Directors, and shall be called by the Chairman of the Board of Directors or the Secretary within 10 days after receipt of the written request of a majority of the total number of Directors which the Corporation would have if there were no vacancies (the "Whole Board") or upon receipt of the written request of the holders of at least 75% of the voting power of the then outstanding shares of Common Stock. Any such request by a majority of the Whole Board or the holders of at least 75% of the voting power of the then outstanding shares of Common Stock shall be sent to the Chairman of the Board of Directors and the Secretary and shall state the purpose or purposes of the proposed meeting. At a special meeting of shareholders, only such business shall be conducted or considered as shall have been stated in the notice of the meeting given by or at the direction of the Board of Directors. 2.4 Notice of Meeting. Written notice of every meeting of the shareholders, stating the place, day, and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not fewer than ten (10) nor more than sixty (60) days before the date of the meeting to each shareholder of record entitled to vote at such meeting. Written notice shall be given personally, by mail, by private courier, by facsimile transmission, or by telegraph, teletype or other form of wire or wireless communication. If mailed, notice shall be deemed to be delivered when deposited in the United States mail with first-class postage thereon prepaid, addressed to the shareholder at his address as it appears on the stock transfer books of the Corporation. When a meeting of the shareholders is adjourned to another place, date or time, by the holders of a majority of the voting power of the voting shares represented at a meeting, whether or not a quorum is present, notice need not be given of the 2 adjourned meeting if the date, time, and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken; provided, however, if the Board is required to fix a new record date pursuant to Section 7.5(a) of these Bylaws, notice must be given to persons who are shareholders as of the new record date entitled to vote as such meeting. At an adjourned meeting at which a quorum is present or represented, any business that could have been transacted at the meeting originally called may be transacted. 2.5 Waiver of Notice. Notice of a meeting need not be given to any shareholder who signs a waiver of notice, in person or by proxy, either before or after the date and time stated in the notice. Waiver must be in writing and delivered to the Corporation for inclusion in the minutes or for filing with the corporate records. Attendance of a shareholder at a meeting, either in person or by proxy, shall of itself constitute waiver of notice and waiver of any and all objections to: (1) lack of notice or defective notice of a meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and (2) consideration at the meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented. Neither the business transacted nor the purpose of the meeting need be specified in the waiver, except that any waiver by a shareholder of the notice of a meeting of shareholders with respect to an amendment of the Articles of Incorporation, a plan of merger or share exchange, a sale of assets, or any other action which would entitle the shareholder to dissent and obtain payment for his shares shall not be effective unless: (a) prior to execution of the waiver, the shareholder is furnished with the same material required to be sent to the shareholder in a notice of the meeting, including notice of any applicable dissenters' rights; or (b) the waiver expressly waives the right to receive the materials required to be furnished. 3 2.6 Inspectors. The Board of Directors shall appoint one or more inspectors of election to act as judges of the voting and to determine those entitled to vote at any meeting of the shareholders, or any adjournment thereof, in advance of such meeting, but if the Board of Directors fails to make such appointment(s) or if an appointee fails to serve, the presiding officer of the meeting of the shareholders may appoint one or more inspectors (or substitute inspectors) to act at the meeting. 2.7 Quorum. Except as may be provided in the Articles of Incorporation, a majority of the votes entitled to be cast on a matter by the voting group, represented in person or by proxy, shall constitute a quorum of that voting group for action on that matter. Once a share is represented at a meeting for any purpose, other than solely to object to holding the meeting or transacting business at the meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for the adjourned meeting. 2.8 Voting. Except as provided in the Articles of Incorporation or as otherwise provided by law, each outstanding share shall be entitled to one vote on each matter submitted to a vote at a meeting of the shareholders. The vote upon any question brought before a meeting of the shareholders may be by voice vote, unless otherwise required by the Articles of Incorporation or these Bylaws or unless the presiding officer or the holders of a majority of the voting power of the then outstanding shares of all classes of stock entitled to vote thereon present in person or by proxy at such meeting shall determine otherwise. Every vote taken by written ballot shall be counted by the inspector(s) of election. Except as provided in these Bylaws, the Articles of Incorporation or by law, if a quorum exists, action on a matter (other than the election of Directors) by a voting group is approved if the votes cast within the voting group favoring the 4 action exceed the votes cast opposing the action. Directors shall be elected at the annual meeting by a plurality of the votes cast by shares entitled to vote in the election. 2.9 Proxies. A shareholder may vote his shares in person or by proxy. A shareholder may appoint a proxy by executing a writing which authorizes another person or persons to vote or otherwise act on the shareholder's behalf. Execution may be accomplished by any reasonable means, including facsimile transmission. A proxy is effective when received by the inspector of elections and is valid for eleven (11) months from the date of its execution, unless a longer period is expressly provided in the appointment form. An appointment of proxy is revocable by a shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest. 2.10 Order of Business. (a) The Chairman of the Board of Directors, or such officer of the Corporation designated by a majority of the Whole Board (as such term is defined in Section 2.3 of these Bylaws), shall call meetings of the shareholders of the Corporation to order and shall act as presiding officer thereof. Unless otherwise determined by the Board of Directors prior to the meeting, the presiding officer of the meeting of the shareholders shall determine the order of business and shall have the authority in his discretion to regulate the conduct of any such meeting, including, without limitation, by imposing restrictions on the persons (other than shareholders of the Corporation or their duly appointed proxies) who may attend any such shareholders' meeting; by excluding any shareholder or his proxy from any such meeting based upon the determination by the presiding officer, in his sole discretion, that any such person has unduly disrupted or is likely to disrupt the proceedings thereat; and by determining the circumstances in which any person may make a statement or ask questions at any such meeting. 5 (b) At an annual meeting of the shareholders, only such business shall be conducted or considered as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) otherwise properly brought before the meeting by or at the direction of a majority of the Whole Board, or (iii) otherwise properly requested to be brought before the meeting by a shareholder of the Corporation. (c) For business to be properly requested to be brought before an annual meeting by a shareholder of the Corporation, the shareholder (i) must be a shareholder of record at the time of the giving of the notice for such annual meeting provided for in the Bylaws of this Corporation, (ii) must be entitled to vote at such meeting, and (iii) must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation not fewer than 60 days nor more than 90 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is changed by more than 30 days from such anniversary date, notice by the shareholder to be timely must be so received not later than the close of business on the 10th day following the day on which public announcement is first made of the changed date of the meeting. A shareholder's notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the Corporation's books, of the shareholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is made, (iii) the class and number of 6 shares of the Corporation that are owned beneficially and of record by the shareholder proposing such business and by the beneficial owner, if any, on whose behalf the proposal is made, and (iv) any material interest of such shareholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is made, in such business. Notwithstanding anything in this Section 2.10 to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 2.10. The presiding officer of the annual meeting shall, if the facts warrant, determine that business was not properly brought before the meeting in accordance with the procedures prescribed in this Section 2.10 and, if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 2.10, a shareholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this Section 2.10. For purposes of this Section 2.10 and Section 3.5 of these Bylaws, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service, in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended, or in shareholder correspondence or a shareholder report. Nothing in this Bylaw shall be deemed to affect any rights of shareholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, including, but not limited to, the time periods specified to exercise such rights. 7 ARTICLE 3. DIRECTORS 3.1 Powers. The business and affairs of the Corporation shall be managed under the direction of its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Articles of Incorporation directed or required to be exercised or done by the shareholders. 3.2 Number, Qualification and Term of Office. The authorized number of Directors may be determined from time to time only by a vote of a majority of the Whole Board (as defined in Section 2.3 of these Bylaws) or by the affirmative vote of the holders of at least 66-2/3% of the voting power of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class, but in no case shall the number of Directors be fewer than 3 or more than 16. The Directors shall be natural persons of the age of eighteen (18) years or older, but need not be residents of the State of Georgia or hold shares of stock in the Corporation. The Directors shall be classified with respect to the time for which they severally hold office into three classes, as nearly equal in number as possible, designated Class I, Class II and Class III. The Directors first appointed to Class I shall hold office for a term expiring at the annual meeting of shareholders to be held in 2002; the Directors first appointed to Class II shall hold office for a term expiring at the annual meeting of shareholders to be held in 2003; and the Directors first appointed to Class III shall hold office for a term expiring at the annual meeting of shareholders to be held in 2004, with the members of each class to hold office until their successors are elected and qualified. At each succeeding annual meeting of the shareholders of the Corporation, the successors of the class of Directors whose term expires at that meeting shall be elected by plurality vote of all votes cast at such 8 meeting to hold office for a term expiring at the annual meeting of shareholders held in the third year following the year of their election. 3.3 Vacancies and Newly Created Directorships. Newly created directorships resulting from any increase in the number of Directors and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled solely by the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining Director. Any Director elected to fill a vacancy shall be elected for the unexpired term of the class of Directors in which the vacancy occurred. Any Director elected by reason of an increase in the number of directors shall be elected only for a term of office continuing until the next election of directors by the shareholders and until the election and qualification of such Director's successor. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of an incumbent Director. A vacancy that will occur at a specific date (including but not limited to a resignation that specifies a later date) may be filled before the vacancy occurs, but the new Director may not take office until the vacancy occurs. 3.4 Removal of Directors. Any or all of the Directors of the Corporation may be removed with cause by the affirmative vote of the holders of at least 66-2/3% of the voting power of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class. A Director may be removed by the shareholders only at a meeting called for the purpose of removing him, and the meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the Director. 3.5 Nominations of Directors; Election. Only persons who are nominated in accordance with the following procedures shall be eligible for election as Directors of the Corporation. Nominations of persons for election as Directors of the Corporation may be made 9 by (i) the Board of Directors or a committee appointed by the Board of Directors, or (ii) any person who is a shareholder of record at the time of giving of notice for the meeting provided for in these Bylaws, who is entitled to vote for the election of Directors and who complies with the procedures set forth in this Section 3.5. All nominations by shareholders shall be made pursuant to timely notice in proper written form to the Secretary of the Corporation. To be timely, a shareholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation: (i) in the case of an annual meeting, not fewer than 60 days nor more than 90 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is changed by more than 30 days from such anniversary date, notice by the shareholder to be timely must be so received not later than the close of business on the 10th day following the day on which public announcement is first made of the changed date of the meeting; and (ii) in the case of a special meeting at which Directors are to be elected, not later than the close of business on the 10th day following the day on which public announcement is first made of the changed date of the meeting. To be in proper written form, such shareholder's notice shall set forth or include (i) the name and address, as they appear on the Corporation's books, of the shareholder giving the notice and of the beneficial owner, if any, on whose behalf the nomination is made; (ii) a representation that the shareholder giving the notice is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) the class and number of shares of stock of the Corporation owned beneficially and of record by the shareholder giving the notice and by the beneficial owner, if any, on whose behalf the nomination is made; (iv) a description of all arrangements or understandings between or among any of (A) the shareholder giving the notice, (B) the beneficial 10 owner on whose behalf the notice is given, (C) each nominee, and (D) any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder giving the notice; (v) such other information regarding each nominee proposed by the shareholder giving the notice as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission, had the nominee been nominated, or intended to be nominated, by the Board of Directors; and (vi) the signed consent of each nominee to serve as a Director of the Corporation if so elected. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a Director shall furnish to the Secretary of the Corporation that information required to be set forth in a shareholder's notice of nomination which pertains to the nominee. The presiding officer of the meeting for election of Directors shall, if the facts warrant, determine that a nomination was not made in accordance with the procedures prescribed by this Section 3.5, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 3.5, a shareholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this Section 3.5. 3.6 Resignation. Any Director may resign at any time by giving written notice of his resignation to the Board of Directors, the Chairman of the Board of Directors or the Corporation. 3.7 Compensation. The Board of Directors may establish the compensation for, and reimbursement of the expenses of, Directors for membership on the Board of Directors and on committees of the Board of Directors, attendance at meetings of the Board of Directors or committees of the Board of Directors, and for other services by Directors to the Corporation. 11 3.8 Interested Director Transactions. An interested Director is one who is a party to a contract or transaction with the Corporation or who is an officer or Director of, or has a financial interest in, another corporation, partnership, association, or other entity which is a party to a contract or transaction with the Corporation. Transactions involving such a Director shall be governed by Section 14-2-860, et seq., of the Georgia Business Corporation Code, as the same may hereinafter be amended. ARTICLE 4. MEETINGS OF THE BOARD 4.1 Regular Meetings. Regular meetings of the Board of Directors may be held without notice immediately after the annual meeting of the shareholders and at such other time and place either within or without the State of Georgia as shall from time to time be determined by the Board of Directors. 4.2 Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors or the President, on one day's written notice to each Director by whom such notice is not waived. Notice shall be given personally, by mail, by private courier, by facsimile transmission, or by telegraph, teletype or other form of wire or wireless communication, and need not describe the business to be transacted at, or the purpose of, the special meeting. Special meetings of the Board of Directors may be held at such time and place either within or without the State of Georgia as is determined by the Board of Directors or specified in the notice of any such meeting. 4.3 Waiver of Notice. A Director may waive any notice either before or after the date and time stated in the notice. Such a waiver must be in writing, signed by the Director and delivered to the Corporation for inclusion in the minutes or filing with the corporate records. 12 Attendance of a Director at a meeting shall constitute a waiver of notice of that meeting unless the Director at the beginning of the meeting (or promptly upon arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting. 4.4 Quorum. A quorum of the Board of Directors consists of a majority of the number of Directors then in office. If a quorum is present, the acts of a majority of the Directors in attendance shall be the acts of the Board of Directors. A Director who is present at a meeting of the Board of Directors when corporate action is taken is deemed to have assented to the action taken unless: (a) that Director objects at the beginning of the meeting (or promptly upon arrival) to holding the meeting or to transacting business at the meeting; (b) the dissent or abstention of that Director from the action taken is entered into the minutes of the meeting; or (c) that Director delivers written notice of dissent or abstention to the presiding officer of the meeting before, or to the Corporation immediately after, adjournment of the meeting. The right of dissent is not available to a Director who votes in favor of an action taken. 4.5 Adjournment. A meeting of the Board of Directors may be adjourned by a majority of the Directors present, whether or not a quorum exists. Notice of the time and the place of the adjourned meeting and of the business to be transacted thereat, other than by announcement at the meeting at which the adjournment is taken, shall not be necessary. At an adjourned meeting at which a quorum is present, any business may be transacted which could have been transacted at the meeting originally called. 4.6 Participation in Meetings Other Than in Person. Members of the Board of Directors may participate in a meeting of the Board by any means of communication by which 13 all persons participating in the meeting can hear each other. Participation in a meeting in such manner shall constitute presence in person at such meeting. 4.7 Rules. The Board of Directors may adopt rules and regulations that are not inconsistent with law or these Bylaws for the conduct of their meetings and the management of the affairs of the Corporation. ARTICLE 5. COMMITTEES 5.1 Formation and Powers. The Board of Directors, by resolution passed by a majority of the Whole Board (as defined in Section 2.3 of these Bylaws), may create one or more committees and appoint members of the Board of Directors to serve thereon. Each committee shall have such lawfully delegable powers and duties as the Board of Directors may confer. However, a committee shall not have the power to: (i) approve or propose to shareholders action that the Georgia Business Corporation Code requires to be approved by shareholders; (ii) fill vacancies on the Board of Directors or on any of its committees; (iii) amend the Articles of Incorporation pursuant to Section 14-2-1002 of the Georgia Business Corporation Code, as it may hereafter be amended; (iv) adopt, amend or repeal these Bylaws; or (v) approve a plan of merger not requiring shareholder approval. Any committee or committees so designated by the Board of Directors shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Unless otherwise prescribed by the Board of Directors, a majority of the members of the committee shall constitute a quorum for the transaction of business, and the act of a majority of the members present at a meeting at which there is a quorum shall be the act of such committee. Each committee shall prescribe its own rules for calling and holding meetings and its method of procedure, subject to any rules 14 prescribed by the Board of Directors or by applicable law, and shall keep a written record of all actions taken by it. 5.2 Removal. The Board of Directors shall have power at any time to remove any member of any committee, with or without cause, to fill vacancies on any committee, and to dissolve any committee. ARTICLE 6. OFFICERS 6.1 Generally. The officers of the Company shall be elected by the Board of Directors and shall consist of a Chief Executive Officer, a President, a Secretary, and a Treasurer. The Board of Directors may also choose any or all of the following: a Controller, one or more Vice Presidents (who may be given particular designations with respect to authority, function, or seniority), and such other officers as the Board of Directors may from time to time determine. Notwithstanding the foregoing, by specific action the Board of Directors may authorize the Chairman of the Board of Directors to appoint any person to any office other than Chief Executive Officer, President, Secretary, or Treasurer. Any number of offices may be held by the same person. Any of the offices may be left vacant from time to time as the Board of Directors may determine. In the case of the absence or disability of any officer of the Company or for any other reason deemed sufficient by a majority of the Board of Directors, the Board of Directors may delegate the absent or disabled officer's powers or duties to any other officer or to any Director. 6.2 Compensation. The compensation of all officers and agents of the Company who are also Directors of the Company shall be fixed by the Board of Directors or by a committee of the Board of Directors. The Board of Directors may fix the compensation of other officers and 15 agents of the Company or delegate the power to fix such compensation to an officer of the Company. 6.3 Succession. The officers of the Company will hold office until their successors are elected and qualified. Any officer may be removed at any time by the affirmative vote of a majority of the Whole Board. Any vacancy occurring in any office of the Company may be filled by the Board of Directors or by the Chairman of the Board of Directors as provided in Section 6.1 of these Bylaws. 6.4 Authority and Duties. Each of the officers of the Corporation shall have such authority and shall perform such duties as are customarily incident to their respective offices, or as may be specified from time to time by the Board of Directors. 6.5 Interested Officer Transactions. An interested officer is one who is a party to a contract or transaction with the Corporation or who is an officer or Director of, or has a financial interest in, another corporation, partnership, association, or other entity which is a party to a contract or transaction with the Corporation. Transactions involving such an officer shall be governed by Section 14-2-864 of the Georgia Business Corporation Code, as the same may hereinafter be amended. ARTICLE 7. CAPITAL STOCK 7.1 Certificates. The interest of each shareholder may be evidenced by a certificate or certificates representing shares of stock of the Corporation, which shall be in such form as the Board of Directors may from time to time adopt, shall be numbered and shall be entered in the books of the Corporation as they are issued. Each share certificate shall state, on its face, the name of the Corporation and that it is organized under the laws of Georgia, the name of the 16 person to whom it is issued, and the number and class of shares and the designation of the series, if any, that the certificate represents. Also, each certificate may bear the seal of the Corporation or a facsimile thereof and shall be signed, either manually or in facsimile, by any one of the following: the President, the Secretary or an Assistant Secretary, or other officer designated by the Board of Directors for such purpose. If the certificate is signed in facsimile, it must be countersigned by a transfer agent or registered by a registrar other than the Corporation itself or an employee of the Corporation. The transfer agent or registrar may sign either manually or by facsimile. 7.2 Transfers. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue, or to cause its transfer agent to issue, a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. 7.3 Lost, Stolen or Destroyed Certificates. The Secretary may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact, satisfactory to the Secretary, by the person claiming the certificate of stock to be lost, stolen or destroyed. As a condition precedent to the issuance of a new certificate or certificates, the Secretary may require the owners of such lost, stolen or destroyed certificate or certificates to give the Corporation a bond in such sum and with such surety or sureties as the Secretary may direct as indemnity against any claims that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed or the issuance of the new certificate. 17 7.4 Certificateless Shares. The Board of Directors of the Corporation may authorize the issuance of some or all of the shares of stock, of any or all of its classes or series, without certificates. Within a reasonable time after the issue or transfer of the shares without certificates, the Corporation shall send the shareholder to whom a share is to be issued a written statement specifying the name of the Corporation, that the Corporation is organized under the laws of Georgia, the name of the person to whom the shares are issued or transferred, the number and class of shares and the designation of the series, if any, that the certificate represents, and any applicable restriction on the transfer of such shares. 7.5 Record Dates. (a) In order that the Corporation may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to take any other action, the Board of Directors shall in advance fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 70 days before the date of such meeting. If no record date is fixed, the record date for determining shareholders entitled to notice of or to vote at any meeting of shareholders shall be the close of business on the day before the first notice is delivered to shareholders. A determination of shareholders of record entitled to notice of or to vote at a meeting of the shareholders shall apply to any adjournment of the meeting; provided, however, if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting, the Board of Directors shall fix a new record date for the adjourned meeting. (b) In order that the Corporation may determine the shareholders entitled to receive payment of any dividend or other distribution, the Board of Directors may fix a record 18 date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than 70 days prior to such payment. If no record date is fixed, the record date for determining shareholders for any such purpose shall be at the close of business on the day on which the Board of Directors authorizes the distribution. (c) The Corporation shall be entitled to treat the person in whose name any share of its stock is registered as the owner thereof for all purposes, and shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person, whether or not the Corporation shall have notice thereof, except as expressly provided by applicable law. ARTICLE 8. MISCELLANEOUS 8.1 Amendments. Notwithstanding anything contained in the Corporation's Articles of Incorporation to the contrary, unless otherwise required by applicable law, Sections 2.3 (Special Meetings), 2.10 (Order of Business), 3.2 (Number, Qualification and Term of Office), 3.3 (Vacancies and Newly Created Directorships), 3.4 (Removal of Directors), 3.5 (Nominations of Directors; Election), 8.8 (Fair Price Requirements) and 8.9 (Business Combinations with Interested Shareholders) of these Bylaws shall not be amended or repealed by the shareholders, and no provision inconsistent therewith shall be adopted by the shareholders, without the affirmative vote of the holders of at least 66 2/3% of the voting power of the then outstanding shares of Common Stock and outstanding shares of preferred stock voting together, to the extent the outstanding shares of preferred stock are afforded voting rights and powers generally equal to the voting rights and powers of shares of Common Stock. 19 8.2 Inspection of Books. (a) A shareholder may inspect and copy, during regular business hours at the Corporation's principal office, the following if he gives the Corporation written notice of his demand at least five (5) business days prior to the requested date of inspection: (1) the Corporation's Articles of Incorporation and all amendments to them currently in effect; (2) the Corporation's Bylaws and all amendments to them currently in effect; (3) resolutions adopted by either the shareholders or Board of Directors increasing or decreasing the number of Directors, the classification of Directors, if any, and the names and residence addresses of all members of the Board of Directors; (4) resolutions adopted by the Board of Directors creating one or more classes or series of shares, and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding, and any resolutions adopted by the Board of Directors that affect the size of the board of Directors; (5) the minutes of all shareholders' meetings, executed waivers of notice of meetings, and executed written consents evidencing all action taken by shareholders without a meeting, for the previous three years; (6) all written communications to shareholders generally within the previous three years and the financial statements required to be made available to the shareholders for the previous three years under Section 14-2-1620 of the Georgia Business Corporation Code as it may hereinafter be amended; (7) a list of the names and business addresses of its current Directors and officers; and (8) the Corporation's most recent annual registration delivered to the Secretary of State under Section 14-2-1622 of the Georgia Business Corporation Code. (b) A shareholder may inspect and copy, during regular business hours at a reasonable location specified by the Corporation (1) excerpts from minutes of any meeting of the Board of Directors, records of any action of a committee of the Board of Directors while acting in place of the Board of Directors on behalf of the Corporation, minutes of any meeting of the 20 shareholders, and records of action taken by the shareholders or Board of Directors without a meeting, to the extent not subject to inspection under Section 8.1(a); (2) accounting records of the Corporation; and (3) the record of shareholders. A shareholder may inspect these records of the Corporation only if: (i) his demand is made in good faith and for a proper purpose that is reasonably relevant to his legitimate interest as a shareholder; (ii) he describes with reasonable particularity his purpose and the records he desires to inspect; (iii) the records are directly connected with his purpose; (iv) the records are to be used only for the stated purpose; and (v) the shareholder owns more than two percent (2%) of the outstanding shares of the Corporation at the date of his request. 8.3 Seal. The corporate seal shall be in such form as the Board of Directors may from time to time determine. In the event that it is inconvenient at any time to use the corporate seal of the Corporation, the words "Seal" or "Corporate Seal" enclosed in parentheses or scroll shall be deemed the corporate seal of the Corporation. 8.4 Checks, Notes, Drafts, Etc. Checks, notes, drafts, acceptances, bills of exchange, and other orders or obligations for the payment of money shall be signed by such officer or officers or person or persons as the Board of Directors by resolution shall from time to time designate. 8.5 Fiscal Year. The fiscal year of the Corporation shall be fixed from time to time by the Board of Directors. 8.6 Reliance upon Books, Reports and Records. Each Director, each member of a committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon such information, opinions, reports or statements, including financial statements and other financial 21 data, prepared or presented to the Corporation by: (i) any of the Corporation's officers or employees who the Director reasonably believes to be reliable and competent in the matters presented; (ii) legal counsel, public accountants, investment bankers or other persons engaged by the Corporation as to matters the Director reasonably believes are within the person's professional or expert competence; or (iii) committees of the Board of Directors of which he is not a member if the Director reasonably believes the committee merits confidence. 8.7 Time Periods. In applying any provision of these Bylaws that requires that an act be done or not be done a specified number of days prior to an event, or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included. 8.8 Fair Price Requirements. The Corporation shall be governed by all of the requirements of Part 2 of Article 11 of the Georgia Business Corporation Code, as amended. 8.9 Business Combinations with Interested Shareholders. The Corporation shall be governed by all of the requirements of Part 3 of Article 11 of the Georgia Business Corporation Code, as amended. 8.10 Indemnification. Each person who is or was or had agreed to become a Director or officer of the Corporation, or each such person who is or was serving or who had agreed to serve at the request of the Board of Directors or an officer of the Corporation as an employee or agent of the Corporation or as a Director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (including the heirs, executors, administrators or estate of such person), shall be indemnified by the Corporation to the fullest extent permitted by the Georgia Business Corporation Code or any other applicable laws as presently or hereafter in effect. The right to indemnification granted by this Section 8.10 shall include the right to be 22 paid in advance expenses incurred in defending a proceeding. The Corporation may, by action of the Board of Directors, provide indemnification to other employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of Directors and officers. The right of indemnification provided in this Section 8.10 shall not be exclusive of any other rights to which any person seeking indemnification may otherwise be entitled, and shall be applicable to matters otherwise within its scope irrespective of whether such matters arose or arise before or after the adoption of this Section 8.10. Without limiting the generality or the effect of the foregoing, the Corporation may enter into one or more agreements with any person, which provide for indemnification greater or different than that provided in this Section 8.10. No amendment, modification or repeal of this Article shall adversely affect any right or protection of a Director, officer, employee or agent that exists at the time of such amendment, modification or repeal. 23 EX-21 4 g79414exv21.txt EX-21 SUBSIDIARIES OF FLOWERS FOODS, INC. EXHIBIT 21 SUBSIDIARIES OF FLOWERS FOODS, INC.

NAME OF SUBSIDIARY JURISDICTION OF INCORPORATION OR ORGANIZATION ------------------ --------------------------------------------- Flowers Finance, LLC Delaware Flowers Bakeries, LLC Georgia Flowers Bakeries Brands, Inc. Delaware Flowers Baking Co. of Opelika, LLC Alabama Hardin's Bakery, LLC Alabama Bailey Street Bakery, LLC Alabama Home Baking Company, LLC Alabama Flowers Baking Co. of Texarkana, LLC Arkansas Holsum Baking Company, LLC Arkansas Shipley Baking Company, LLC Arkansas Flowers Baking Co. of Florida, LLC Florida Flowers Baking Co. of Miami, LLC Florida Flowers Baking Co. of Jacksonville, LLC Florida Flowers Baking Co. of Bradenton, LLC Florida Flowers Baking Co. of Thomasville, LLC Georgia Flowers Baking Co. of Villa Rica, LLC Georgia Flowers Baking Co. of Tyler, LLC Georgia Flowers Bakery of Tucker, LLC Georgia Table Pride, LLC Georgia Huval Bakery, LLC Louisiana Bunny Bread, LLC Louisiana Flowers Baking Co. of Baton Rouge, LLC Louisiana Flowers Baking Co. of Jamestown, LLC North Carolina

Franklin Baking Company, LLC North Carolina Flowers Baking Co. of Memphis, LLC Tennessee Flowers Baking Co. of Morristown, LLC Tennessee East Tennessee Baking Co., LLC Tennessee West Tennessee Baking Co., LLC Tennessee Schott's Bakery, LLC Texas Flowers Baking Co. of Texas, LLC Texas Butterkrust Bakery, LLC Texas El Paso Baking Co., LLC Texas El Paso Baking Company de Mexico, S.A. de C.V. Mexico San Antonio Baking Co., LLC Texas Austin Baking Co., LLC Texas Corpus Christi Baking Co., LLC Texas Hampton Roads Baking Company, LLC Virginia Flowers Baking Co. of Norfolk, LLC Virginia Flowers Baking Co. of Lynchburg, LLC Virginia Flowers Baking Co. of West Virginia, LLC West Virginia The Donut House, LLC West Virginia Storck Baking Company, LLC West Virginia Flowers Snack, LLC Georgia Flowers Snack of Atlanta, LLC Georgia Flowers Snack of Crossville, LLC Tennessee Flowers Snack Distributors, Inc. Tennessee Flowers Snack of London, LLC Kentucky Mrs. Smith's Bakeries, LLC Georgia Mrs. Smiths Bakery of Montgomery, LLC Alabama Mrs. Smith's Bakeries Sales Support Group, LLC Georgia Mrs. Smith's Foil Company, LLC Georgia Dan-co Bakery, LLC Georgia Mrs. Smith's Bakery of Pembroke, LLC North Carolina Mrs. Smith's Bakeries Frozen Distributors, Inc. Georgia Mrs. Smith's Bakery of Suwanee, LLC Georgia Mrs. Smith's Bakeries of Pennsylvania, LLC Georgia Mrs. Smith's Bakery of Stilwell, LLC Oklahoma Flowers Baking Co. of Fountain Inn, LLC South Carolina Mrs. Smith's Bakery of Spartanburg, LLC South Carolina Mrs. Smith's Brands, Inc. South Carolina EX-99 5 g79414exv99.htm EX-99 SECTION 906 CERTIFICATION OF THE CEO & CFO

EXHIBIT 99

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Flowers Foods, Inc. (the “company”) on Form 10-Q for the period ended October 5, 2002, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company as of the dates and for the periods expressed in the Report.

Date: November 19, 2002

/s/ Amos R. McMullian Amos R. McMullian
Chairman of the Board and Chief Executive Officer

/s/ Jimmy M. Woodward Jimmy M. Woodward
Senior Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-3.2

                                                                     EXHIBIT 3.2


                          AMENDED AND RESTATED BYLAWS

                                       OF

                               FLOWERS FOODS, INC.

                                   ARTICLE 1.

                                     OFFICES

         Flowers Foods, Inc. (the "Corporation") shall maintain at all times a
registered office in the State of Georgia and a registered agent at that
address, but may have other offices located within or without the State of
Georgia as the Board of Directors may determine.

                                   ARTICLE 2.

                            MEETINGS OF SHAREHOLDERS

         2.1      Place and Time of Meetings. All meetings of the shareholders
shall be held at such time and at such place, within or without the State of
Georgia, as may be designated by the Board of Directors or, in the absence of a
designation by the Board of Directors, by the Chairman of the Board of
Directors, the President or the Secretary, and stated in the notice of the
meeting. The Chairman of the Board of Directors may postpone and reschedule any
previously scheduled annual or special meeting of the shareholders of the
Corporation.

         2.2      Annual Meeting. An annual meeting of the shareholders shall be
held at such date, time and place as shall be designated from time to time by
the Board of Directors, at which meeting the shareholders shall elect by a
plurality vote the Directors to succeed those whose terms expire and shall
transact such other business as may be properly brought before the meeting in
accordance with Section 2.10 of these Bylaws.



         2.3      Special Meetings. Special meetings of the shareholders may be
called only as provided in this Section 2.3. Special meetings may be called by
the Chairman of the Board of Directors, and shall be called by the Chairman of
the Board of Directors or the Secretary within 10 days after receipt of the
written request of a majority of the total number of Directors which the
Corporation would have if there were no vacancies (the "Whole Board") or upon
receipt of the written request of the holders of at least 75% of the voting
power of the then outstanding shares of Common Stock. Any such request by a
majority of the Whole Board or the holders of at least 75% of the voting power
of the then outstanding shares of Common Stock shall be sent to the Chairman of
the Board of Directors and the Secretary and shall state the purpose or purposes
of the proposed meeting. At a special meeting of shareholders, only such
business shall be conducted or considered as shall have been stated in the
notice of the meeting given by or at the direction of the Board of Directors.

         2.4      Notice of Meeting. Written notice of every meeting of the
shareholders, stating the place, day, and hour of the meeting, and, in the case
of a special meeting, the purpose or purposes for which the meeting is called,
shall be given not fewer than ten (10) nor more than sixty (60) days before the
date of the meeting to each shareholder of record entitled to vote at such
meeting. Written notice shall be given personally, by mail, by private courier,
by facsimile transmission, or by telegraph, teletype or other form of wire or
wireless communication. If mailed, notice shall be deemed to be delivered when
deposited in the United States mail with first-class postage thereon prepaid,
addressed to the shareholder at his address as it appears on the stock transfer
books of the Corporation. When a meeting of the shareholders is adjourned to
another place, date or time, by the holders of a majority of the voting power of
the voting shares represented at a meeting, whether or not a quorum is present,
notice need not be given of the

                                       2


adjourned meeting if the date, time, and place to which the meeting is adjourned
are announced at the meeting at which the adjournment is taken; provided,
however, if the Board is required to fix a new record date pursuant to Section
7.5(a) of these Bylaws, notice must be given to persons who are shareholders as
of the new record date entitled to vote as such meeting. At an adjourned meeting
at which a quorum is present or represented, any business that could have been
transacted at the meeting originally called may be transacted.

         2.5      Waiver of Notice. Notice of a meeting need not be given to any
shareholder who signs a waiver of notice, in person or by proxy, either before
or after the date and time stated in the notice. Waiver must be in writing and
delivered to the Corporation for inclusion in the minutes or for filing with the
corporate records. Attendance of a shareholder at a meeting, either in person or
by proxy, shall of itself constitute waiver of notice and waiver of any and all
objections to: (1) lack of notice or defective notice of a meeting, unless the
shareholder at the beginning of the meeting objects to holding the meeting or
transacting business at the meeting; and (2) consideration at the meeting of a
particular matter that is not within the purpose or purposes described in the
meeting notice, unless the shareholder objects to considering the matter when it
is presented. Neither the business transacted nor the purpose of the meeting
need be specified in the waiver, except that any waiver by a shareholder of the
notice of a meeting of shareholders with respect to an amendment of the Articles
of Incorporation, a plan of merger or share exchange, a sale of assets, or any
other action which would entitle the shareholder to dissent and obtain payment
for his shares shall not be effective unless: (a) prior to execution of the
waiver, the shareholder is furnished with the same material required to be sent
to the shareholder in a notice of the meeting, including notice of any
applicable dissenters' rights; or (b) the waiver expressly waives the right to
receive the materials required to be furnished.


                                       3


         2.6      Inspectors. The Board of Directors shall appoint one or more
inspectors of election to act as judges of the voting and to determine those
entitled to vote at any meeting of the shareholders, or any adjournment thereof,
in advance of such meeting, but if the Board of Directors fails to make such
appointment(s) or if an appointee fails to serve, the presiding officer of the
meeting of the shareholders may appoint one or more inspectors (or substitute
inspectors) to act at the meeting.

         2.7      Quorum. Except as may be provided in the Articles of
Incorporation, a majority of the votes entitled to be cast on a matter by the
voting group, represented in person or by proxy, shall constitute a quorum of
that voting group for action on that matter. Once a share is represented at a
meeting for any purpose, other than solely to object to holding the meeting or
transacting business at the meeting, it is deemed present for quorum purposes
for the remainder of the meeting and for any adjournment of that meeting unless
a new record date is or must be set for the adjourned meeting.

         2.8      Voting. Except as provided in the Articles of Incorporation or
as otherwise provided by law, each outstanding share shall be entitled to one
vote on each matter submitted to a vote at a meeting of the shareholders. The
vote upon any question brought before a meeting of the shareholders may be by
voice vote, unless otherwise required by the Articles of Incorporation or these
Bylaws or unless the presiding officer or the holders of a majority of the
voting power of the then outstanding shares of all classes of stock entitled to
vote thereon present in person or by proxy at such meeting shall determine
otherwise. Every vote taken by written ballot shall be counted by the
inspector(s) of election. Except as provided in these Bylaws, the Articles of
Incorporation or by law, if a quorum exists, action on a matter (other than the
election of Directors) by a voting group is approved if the votes cast within
the voting group favoring the

                                       4


action exceed the votes cast opposing the action.  Directors shall be elected at
the annual  meeting by a plurality of the votes cast by shares  entitled to vote
in the election.

         2.9      Proxies. A shareholder may vote his shares in person or by
proxy. A shareholder may appoint a proxy by executing a writing which authorizes
another person or persons to vote or otherwise act on the shareholder's behalf.
Execution may be accomplished by any reasonable means, including facsimile
transmission. A proxy is effective when received by the inspector of elections
and is valid for eleven (11) months from the date of its execution, unless a
longer period is expressly provided in the appointment form. An appointment of
proxy is revocable by a shareholder unless the appointment form conspicuously
states that it is irrevocable and the appointment is coupled with an interest.

         2.10     Order of Business.


                  (a)      The Chairman of the Board of Directors, or such
officer of the Corporation designated by a majority of the Whole Board (as such
term is defined in Section 2.3 of these Bylaws), shall call meetings of the
shareholders of the Corporation to order and shall act as presiding officer
thereof. Unless otherwise determined by the Board of Directors prior to the
meeting, the presiding officer of the meeting of the shareholders shall
determine the order of business and shall have the authority in his discretion
to regulate the conduct of any such meeting, including, without limitation, by
imposing restrictions on the persons (other than shareholders of the Corporation
or their duly appointed proxies) who may attend any such shareholders' meeting;
by excluding any shareholder or his proxy from any such meeting based upon the
determination by the presiding officer, in his sole discretion, that any such
person has unduly disrupted or is likely to disrupt the proceedings thereat; and
by determining the circumstances in which any person may make a statement or ask
questions at any such meeting.


                                       5


                  (b)      At an annual meeting of the shareholders, only such
business shall be conducted or considered as shall have been properly brought
before the meeting. To be properly brought before an annual meeting, business
must be (i) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board of Directors, (ii) otherwise properly
brought before the meeting by or at the direction of a majority of the Whole
Board, or (iii) otherwise properly requested to be brought before the meeting by
a shareholder of the Corporation.

                  (c)      For business to be properly requested to be brought
before an annual meeting by a shareholder of the Corporation, the shareholder
(i) must be a shareholder of record at the time of the giving of the notice for
such annual meeting provided for in the Bylaws of this Corporation, (ii) must be
entitled to vote at such meeting, and (iii) must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not fewer than 60 days nor more
than 90 days prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is changed by more than 30 days from such anniversary date, notice by
the shareholder to be timely must be so received not later than the close of
business on the 10th day following the day on which public announcement is first
made of the changed date of the meeting. A shareholder's notice to the Secretary
shall set forth as to each matter the shareholder proposes to bring before the
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and address, as they appear on the Corporation's books,
of the shareholder proposing such business and the beneficial owner, if any, on
whose behalf the proposal is made, (iii) the class and number of

                                       6


shares of the Corporation that are owned beneficially and of record by the
shareholder proposing such business and by the beneficial owner, if any, on
whose behalf the proposal is made, and (iv) any material interest of such
shareholder proposing such business and the beneficial owner, if any, on whose
behalf the proposal is made, in such business. Notwithstanding anything in this
Section 2.10 to the contrary, no business shall be conducted at an annual
meeting except in accordance with the procedures set forth in this Section 2.10.
The presiding officer of the annual meeting shall, if the facts warrant,
determine that business was not properly brought before the meeting in
accordance with the procedures prescribed in this Section 2.10 and, if he should
so determine, he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted. Notwithstanding the
foregoing provisions of this Section 2.10, a shareholder shall also comply with
all applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder with respect to the matters set forth
in this Section 2.10. For purposes of this Section 2.10 and Section 3.5 of these
Bylaws, "public announcement" shall mean disclosure in a press release reported
by the Dow Jones News Service, Associated Press or comparable national news
service, in a document publicly filed by the Corporation with the Securities and
Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, or in shareholder correspondence or a
shareholder report. Nothing in this Bylaw shall be deemed to affect any rights
of shareholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as
amended, including, but not limited to, the time periods specified to exercise
such rights.

                                       7


                                   ARTICLE 3.

                                   DIRECTORS

         3.1      Powers. The business and affairs of the Corporation shall be
managed under the direction of its Board of Directors, which may exercise all
such powers of the Corporation and do all such lawful acts and things as are not
by law or by the Articles of Incorporation directed or required to be exercised
or done by the shareholders.

         3.2      Number, Qualification and Term of Office. The authorized
number of Directors may be determined from time to time only by a vote of a
majority of the Whole Board (as defined in Section 2.3 of these Bylaws) or by
the affirmative vote of the holders of at least 66-2/3% of the voting power of
the then outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of Directors, voting together as a single class, but
in no case shall the number of Directors be fewer than 3 or more than 16. The
Directors shall be natural persons of the age of eighteen (18) years or older,
but need not be residents of the State of Georgia or hold shares of stock in the
Corporation. The Directors shall be classified with respect to the time for
which they severally hold office into three classes, as nearly equal in number
as possible, designated Class I, Class II and Class III. The Directors first
appointed to Class I shall hold office for a term expiring at the annual meeting
of shareholders to be held in 2002; the Directors first appointed to Class II
shall hold office for a term expiring at the annual meeting of shareholders to
be held in 2003; and the Directors first appointed to Class III shall hold
office for a term expiring at the annual meeting of shareholders to be held in
2004, with the members of each class to hold office until their successors are
elected and qualified. At each succeeding annual meeting of the shareholders of
the Corporation, the successors of the class of Directors whose term expires at
that meeting shall be elected by plurality vote of all votes cast at such


                                       8


meeting to hold office for a term expiring at the annual meeting of shareholders
held in the third year following the year of their election.

         3.3      Vacancies and Newly Created Directorships. Newly created
directorships resulting from any increase in the number of Directors and any
vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled solely by the
affirmative vote of a majority of the remaining Directors then in office, even
though less than a quorum of the Board of Directors, or by a sole remaining
Director. Any Director elected to fill a vacancy shall be elected for the
unexpired term of the class of Directors in which the vacancy occurred. Any
Director elected by reason of an increase in the number of directors shall be
elected only for a term of office continuing until the next election of
directors by the shareholders and until the election and qualification of such
Director's successor. No decrease in the number of Directors constituting the
Board of Directors shall shorten the term of an incumbent Director. A vacancy
that will occur at a specific date (including but not limited to a resignation
that specifies a later date) may be filled before the vacancy occurs, but the
new Director may not take office until the vacancy occurs.

         3.4      Removal of Directors. Any or all of the Directors of the
Corporation may be removed with cause by the affirmative vote of the holders of
at least 66-2/3% of the voting power of the then outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
Directors, voting together as a single class. A Director may be removed by the
shareholders only at a meeting called for the purpose of removing him, and the
meeting notice must state that the purpose, or one of the purposes, of the
meeting is removal of the Director.

         3.5      Nominations of Directors; Election. Only persons who are
nominated in accordance with the following procedures shall be eligible for
election as Directors of the Corporation. Nominations of persons for election as
Directors of the Corporation may be made

                                       9


by (i) the Board of Directors or a committee appointed by the Board of
Directors, or (ii) any person who is a shareholder of record at the time of
giving of notice for the meeting provided for in these Bylaws, who is entitled
to vote for the election of Directors and who complies with the procedures set
forth in this Section 3.5. All nominations by shareholders shall be made
pursuant to timely notice in proper written form to the Secretary of the
Corporation. To be timely, a shareholder's notice shall be delivered to or
mailed and received at the principal executive offices of the Corporation: (i)
in the case of an annual meeting, not fewer than 60 days nor more than 90 days
prior to the first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is changed by
more than 30 days from such anniversary date, notice by the shareholder to be
timely must be so received not later than the close of business on the 10th day
following the day on which public announcement is first made of the changed date
of the meeting; and (ii) in the case of a special meeting at which Directors are
to be elected, not later than the close of business on the 10th day following
the day on which public announcement is first made of the changed date of the
meeting. To be in proper written form, such shareholder's notice shall set forth
or include (i) the name and address, as they appear on the Corporation's books,
of the shareholder giving the notice and of the beneficial owner, if any, on
whose behalf the nomination is made; (ii) a representation that the shareholder
giving the notice is a holder of record of stock of the Corporation entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice; (iii) the class and
number of shares of stock of the Corporation owned beneficially and of record by
the shareholder giving the notice and by the beneficial owner, if any, on whose
behalf the nomination is made; (iv) a description of all arrangements or
understandings between or among any of (A) the shareholder giving the notice,
(B) the beneficial

                                       10


owner on whose behalf the notice is given, (C) each nominee, and (D) any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder giving the notice;
(v) such other information regarding each nominee proposed by the shareholder
giving the notice as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated, or intended to be nominated, by the Board of Directors;
and (vi) the signed consent of each nominee to serve as a Director of the
Corporation if so elected. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a Director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
shareholder's notice of nomination which pertains to the nominee. The presiding
officer of the meeting for election of Directors shall, if the facts warrant,
determine that a nomination was not made in accordance with the procedures
prescribed by this Section 3.5, and if he should so determine, he shall so
declare to the meeting and the defective nomination shall be disregarded.
Notwithstanding the foregoing provisions of this Section 3.5, a shareholder
shall also comply with all applicable requirements of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder with respect
to the matters set forth in this Section 3.5.

         3.6      Resignation. Any Director may resign at any time by giving
written notice of his resignation to the Board of Directors, the Chairman of the
Board of Directors or the Corporation.

         3.7      Compensation. The Board of Directors may establish the
compensation for, and reimbursement of the expenses of, Directors for membership
on the Board of Directors and on committees of the Board of Directors,
attendance at meetings of the Board of Directors or committees of the Board of
Directors, and for other services by Directors to the Corporation.


                                       11


         3.8      Interested Director Transactions. An interested Director is
one who is a party to a contract or transaction with the Corporation or who is
an officer or Director of, or has a financial interest in, another corporation,
partnership, association, or other entity which is a party to a contract or
transaction with the Corporation. Transactions involving such a Director shall
be governed by Section 14-2-860, et seq., of the Georgia Business Corporation
Code, as the same may hereinafter be amended.

                                   ARTICLE 4.

                             MEETINGS OF THE BOARD

         4.1      Regular Meetings. Regular meetings of the Board of Directors
may be held without notice immediately after the annual meeting of the
shareholders and at such other time and place either within or without the State
of Georgia as shall from time to time be determined by the Board of Directors.

         4.2      Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board of Directors or the President, on one
day's written notice to each Director by whom such notice is not waived. Notice
shall be given personally, by mail, by private courier, by facsimile
transmission, or by telegraph, teletype or other form of wire or wireless
communication, and need not describe the business to be transacted at, or the
purpose of, the special meeting. Special meetings of the Board of Directors may
be held at such time and place either within or without the State of Georgia as
is determined by the Board of Directors or specified in the notice of any such
meeting.

         4.3      Waiver of Notice. A Director may waive any notice either
before or after the date and time stated in the notice. Such a waiver must be in
writing, signed by the Director and delivered to the Corporation for inclusion
in the minutes or filing with the corporate records.

                                       12


Attendance of a Director at a meeting shall constitute a waiver of notice of
that meeting unless the Director at the beginning of the meeting (or promptly
upon arrival) objects to holding the meeting or transacting business at the
meeting and does not thereafter vote for or assent to action taken at the
meeting.

         4.4      Quorum. A quorum of the Board of Directors consists of a
majority of the number of Directors then in office. If a quorum is present, the
acts of a majority of the Directors in attendance shall be the acts of the Board
of Directors. A Director who is present at a meeting of the Board of Directors
when corporate action is taken is deemed to have assented to the action taken
unless: (a) that Director objects at the beginning of the meeting (or promptly
upon arrival) to holding the meeting or to transacting business at the meeting;
(b) the dissent or abstention of that Director from the action taken is entered
into the minutes of the meeting; or (c) that Director delivers written notice of
dissent or abstention to the presiding officer of the meeting before, or to the
Corporation immediately after, adjournment of the meeting. The right of dissent
is not available to a Director who votes in favor of an action taken.

         4.5      Adjournment. A meeting of the Board of Directors may be
adjourned by a majority of the Directors present, whether or not a quorum
exists. Notice of the time and the place of the adjourned meeting and of the
business to be transacted thereat, other than by announcement at the meeting at
which the adjournment is taken, shall not be necessary. At an adjourned meeting
at which a quorum is present, any business may be transacted which could have
been transacted at the meeting originally called.

         4.6      Participation in Meetings Other Than in Person. Members of the
Board of Directors may participate in a meeting of the Board by any means of
communication by which

                                       13


all persons participating in the meeting can hear each other. Participation in a
meeting in such manner shall constitute presence in person at such meeting.

         4.7      Rules. The Board of Directors may adopt rules and regulations
that are not inconsistent with law or these Bylaws for the conduct of their
meetings and the management of the affairs of the Corporation.

                                   ARTICLE 5.

                                   COMMITTEES

         5.1      Formation and Powers. The Board of Directors, by resolution
passed by a majority of the Whole Board (as defined in Section 2.3 of these
Bylaws), may create one or more committees and appoint members of the Board of
Directors to serve thereon. Each committee shall have such lawfully delegable
powers and duties as the Board of Directors may confer. However, a committee
shall not have the power to: (i) approve or propose to shareholders action that
the Georgia Business Corporation Code requires to be approved by shareholders;
(ii) fill vacancies on the Board of Directors or on any of its committees; (iii)
amend the Articles of Incorporation pursuant to Section 14-2-1002 of the Georgia
Business Corporation Code, as it may hereafter be amended; (iv) adopt, amend or
repeal these Bylaws; or (v) approve a plan of merger not requiring shareholder
approval. Any committee or committees so designated by the Board of Directors
shall have such name or names as may be determined from time to time by
resolution adopted by the Board of Directors. Unless otherwise prescribed by the
Board of Directors, a majority of the members of the committee shall constitute
a quorum for the transaction of business, and the act of a majority of the
members present at a meeting at which there is a quorum shall be the act of such
committee. Each committee shall prescribe its own rules for calling and holding
meetings and its method of procedure, subject to any rules

                                       14


prescribed by the Board of Directors or by applicable law, and shall keep a
written record of all actions taken by it.

         5.2      Removal. The Board of Directors shall have power at any time
to remove any member of any committee, with or without cause, to fill vacancies
on any committee, and to dissolve any committee.

                                   ARTICLE 6.

                                    OFFICERS

         6.1      Generally. The officers of the Company shall be elected by the
Board of Directors and shall consist of a Chief Executive Officer, a President,
a Secretary, and a Treasurer. The Board of Directors may also choose any or all
of the following: a Controller, one or more Vice Presidents (who may be given
particular designations with respect to authority, function, or seniority), and
such other officers as the Board of Directors may from time to time determine.
Notwithstanding the foregoing, by specific action the Board of Directors may
authorize the Chairman of the Board of Directors to appoint any person to any
office other than Chief Executive Officer, President, Secretary, or Treasurer.
Any number of offices may be held by the same person. Any of the offices may be
left vacant from time to time as the Board of Directors may determine. In the
case of the absence or disability of any officer of the Company or for any other
reason deemed sufficient by a majority of the Board of Directors, the Board of
Directors may delegate the absent or disabled officer's powers or duties to any
other officer or to any Director.

         6.2      Compensation. The compensation of all officers and agents of
the Company who are also Directors of the Company shall be fixed by the Board of
Directors or by a committee of the Board of Directors. The Board of Directors
may fix the compensation of other officers and


                                       15


agents of the Company or delegate the power to fix such compensation to an
officer of the Company.

         6.3      Succession. The officers of the Company will hold office until
their successors are elected and qualified. Any officer may be removed at any
time by the affirmative vote of a majority of the Whole Board. Any vacancy
occurring in any office of the Company may be filled by the Board of Directors
or by the Chairman of the Board of Directors as provided in Section 6.1 of these
Bylaws.

         6.4      Authority and Duties. Each of the officers of the Corporation
shall have such authority and shall perform such duties as are customarily
incident to their respective offices, or as may be specified from time to time
by the Board of Directors.

         6.5      Interested Officer Transactions. An interested officer is one
who is a party to a contract or transaction with the Corporation or who is an
officer or Director of, or has a financial interest in, another corporation,
partnership, association, or other entity which is a party to a contract or
transaction with the Corporation. Transactions involving such an officer shall
be governed by Section 14-2-864 of the Georgia Business Corporation Code, as the
same may hereinafter be amended.

                                   ARTICLE 7.

                                 CAPITAL STOCK


         7.1      Certificates. The interest of each shareholder may be
evidenced by a certificate or certificates representing shares of stock of the
Corporation, which shall be in such form as the Board of Directors may from time
to time adopt, shall be numbered and shall be entered in the books of the
Corporation as they are issued. Each share certificate shall state, on its face,
the name of the Corporation and that it is organized under the laws of Georgia,
the name of the

                                       16


person to whom it is issued, and the number and class of shares and the
designation of the series, if any, that the certificate represents. Also, each
certificate may bear the seal of the Corporation or a facsimile thereof and
shall be signed, either manually or in facsimile, by any one of the following:
the President, the Secretary or an Assistant Secretary, or other officer
designated by the Board of Directors for such purpose. If the certificate is
signed in facsimile, it must be countersigned by a transfer agent or registered
by a registrar other than the Corporation itself or an employee of the
Corporation. The transfer agent or registrar may sign either manually or by
facsimile.

         7.2      Transfers. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue, or to cause its
transfer agent to issue, a new certificate to the person entitled thereto,
cancel the old certificate and record the transaction upon its books.

         7.3      Lost, Stolen or Destroyed Certificates. The Secretary may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact, satisfactory to the Secretary, by the person claiming the certificate of
stock to be lost, stolen or destroyed. As a condition precedent to the issuance
of a new certificate or certificates, the Secretary may require the owners of
such lost, stolen or destroyed certificate or certificates to give the
Corporation a bond in such sum and with such surety or sureties as the Secretary
may direct as indemnity against any claims that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen or
destroyed or the issuance of the new certificate.

                                       17


         7.4      Certificateless Shares. The Board of Directors of the
Corporation may authorize the issuance of some or all of the shares of stock, of
any or all of its classes or series, without certificates. Within a reasonable
time after the issue or transfer of the shares without certificates, the
Corporation shall send the shareholder to whom a share is to be issued a written
statement specifying the name of the Corporation, that the Corporation is
organized under the laws of Georgia, the name of the person to whom the shares
are issued or transferred, the number and class of shares and the designation of
the series, if any, that the certificate represents, and any applicable
restriction on the transfer of such shares.


         7.5      Record Dates.

                  (a)      In order that the Corporation may determine the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to take any other action, the Board of Directors
shall in advance fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date shall not be more than 70 days before the date
of such meeting. If no record date is fixed, the record date for determining
shareholders entitled to notice of or to vote at any meeting of shareholders
shall be the close of business on the day before the first notice is delivered
to shareholders. A determination of shareholders of record entitled to notice of
or to vote at a meeting of the shareholders shall apply to any adjournment of
the meeting; provided, however, if the meeting is adjourned to a date more than
120 days after the date fixed for the original meeting, the Board of Directors
shall fix a new record date for the adjourned meeting.

                  (b)      In order that the Corporation may determine the
shareholders entitled to receive payment of any dividend or other distribution,
the Board of Directors may fix a record

                                       18


date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted, and which record date shall not be more than
70 days prior to such payment. If no record date is fixed, the record date for
determining shareholders for any such purpose shall be at the close of business
on the day on which the Board of Directors authorizes the distribution.

                  (c)      The Corporation shall be entitled to treat the person
in whose name any share of its stock is registered as the owner thereof for all
purposes, and shall not be bound to recognize any equitable or other claim to,
or interest in, such share on the part of any other person, whether or not the
Corporation shall have notice thereof, except as expressly provided by
applicable law.

                                   ARTICLE 8.

                                 MISCELLANEOUS


         8.1      Amendments. Notwithstanding anything contained in the
Corporation's Articles of Incorporation to the contrary, unless otherwise
required by applicable law, Sections 2.3 (Special Meetings), 2.10 (Order of
Business), 3.2 (Number, Qualification and Term of Office), 3.3 (Vacancies and
Newly Created Directorships), 3.4 (Removal of Directors), 3.5 (Nominations of
Directors; Election), 8.8 (Fair Price Requirements) and 8.9 (Business
Combinations with Interested Shareholders) of these Bylaws shall not be amended
or repealed by the shareholders, and no provision inconsistent therewith shall
be adopted by the shareholders, without the affirmative vote of the holders of
at least 66 2/3% of the voting power of the then outstanding shares of Common
Stock and outstanding shares of preferred stock voting together, to the extent
the outstanding shares of preferred stock are afforded voting rights and powers
generally equal to the voting rights and powers of shares of Common Stock.


                                       19

         8.2      Inspection of Books.

                  (a)      A shareholder may inspect and copy, during regular
business hours at the Corporation's principal office, the following if he gives
the Corporation written notice of his demand at least five (5) business days
prior to the requested date of inspection: (1) the Corporation's Articles of
Incorporation and all amendments to them currently in effect; (2) the
Corporation's Bylaws and all amendments to them currently in effect; (3)
resolutions adopted by either the shareholders or Board of Directors increasing
or decreasing the number of Directors, the classification of Directors, if any,
and the names and residence addresses of all members of the Board of Directors;
(4) resolutions adopted by the Board of Directors creating one or more classes
or series of shares, and fixing their relative rights, preferences, and
limitations, if shares issued pursuant to those resolutions are outstanding, and
any resolutions adopted by the Board of Directors that affect the size of the
board of Directors; (5) the minutes of all shareholders' meetings, executed
waivers of notice of meetings, and executed written consents evidencing all
action taken by shareholders without a meeting, for the previous three years;
(6) all written communications to shareholders generally within the previous
three years and the financial statements required to be made available to the
shareholders for the previous three years under Section 14-2-1620 of the Georgia
Business Corporation Code as it may hereinafter be amended; (7) a list of the
names and business addresses of its current Directors and officers; and (8) the
Corporation's most recent annual registration delivered to the Secretary of
State under Section 14-2-1622 of the Georgia Business Corporation Code.

                  (b)      A shareholder may inspect and copy, during regular
business hours at a reasonable location specified by the Corporation (1)
excerpts from minutes of any meeting of the Board of Directors, records of any
action of a committee of the Board of Directors while acting in place of the
Board of Directors on behalf of the Corporation, minutes of any meeting of the

                                       20


shareholders, and records of action taken by the shareholders or Board of
Directors without a meeting, to the extent not subject to inspection under
Section 8.1(a); (2) accounting records of the Corporation; and (3) the record of
shareholders. A shareholder may inspect these records of the Corporation only
if: (i) his demand is made in good faith and for a proper purpose that is
reasonably relevant to his legitimate interest as a shareholder; (ii) he
describes with reasonable particularity his purpose and the records he desires
to inspect; (iii) the records are directly connected with his purpose; (iv) the
records are to be used only for the stated purpose; and (v) the shareholder owns
more than two percent (2%) of the outstanding shares of the Corporation at the
date of his request.

         8.3      Seal. The corporate seal shall be in such form as the Board of
Directors may from time to time determine. In the event that it is inconvenient
at any time to use the corporate seal of the Corporation, the words "Seal" or
"Corporate Seal" enclosed in parentheses or scroll shall be deemed the corporate
seal of the Corporation.

         8.4      Checks, Notes, Drafts, Etc. Checks, notes, drafts,
acceptances, bills of exchange, and other orders or obligations for the payment
of money shall be signed by such officer or officers or person or persons as the
Board of Directors by resolution shall from time to time designate.

         8.5      Fiscal Year. The fiscal year of the Corporation shall be fixed
from time to time by the Board of Directors.

         8.6      Reliance upon Books, Reports and Records. Each Director, each
member of a committee designated by the Board of Directors, and each officer of
the Corporation shall, in the performance of his or her duties, be fully
protected in relying in good faith upon such information, opinions, reports or
statements, including financial statements and other financial


                                       21


data, prepared or presented to the Corporation by: (i) any of the Corporation's
officers or employees who the Director reasonably believes to be reliable and
competent in the matters presented; (ii) legal counsel, public accountants,
investment bankers or other persons engaged by the Corporation as to matters the
Director reasonably believes are within the person's professional or expert
competence; or (iii) committees of the Board of Directors of which he is not a
member if the Director reasonably believes the committee merits confidence.

         8.7      Time Periods. In applying any provision of these Bylaws that
requires that an act be done or not be done a specified number of days prior to
an event, or that an act be done during a period of a specified number of days
prior to an event, calendar days shall be used, the day of the doing of the act
shall be excluded, and the day of the event shall be included.

         8.8      Fair Price Requirements. The Corporation shall be governed by
all of the requirements of Part 2 of Article 11 of the Georgia Business
Corporation Code, as amended.

         8.9      Business Combinations with Interested Shareholders. The
Corporation shall be governed by all of the requirements of Part 3 of Article 11
of the Georgia Business Corporation Code, as amended.

         8.10     Indemnification. Each person who is or was or had agreed to
become a Director or officer of the Corporation, or each such person who is or
was serving or who had agreed to serve at the request of the Board of Directors
or an officer of the Corporation as an employee or agent of the Corporation or
as a Director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise (including the heirs, executors,
administrators or estate of such person), shall be indemnified by the
Corporation to the fullest extent permitted by the Georgia Business Corporation
Code or any other applicable laws as presently or hereafter in effect. The right
to indemnification granted by this Section 8.10 shall include the right to be

                                       22


paid in advance expenses incurred in defending a proceeding. The Corporation
may, by action of the Board of Directors, provide indemnification to other
employees and agents of the Corporation with the same scope and effect as the
foregoing indemnification of Directors and officers. The right of
indemnification provided in this Section 8.10 shall not be exclusive of any
other rights to which any person seeking indemnification may otherwise be
entitled, and shall be applicable to matters otherwise within its scope
irrespective of whether such matters arose or arise before or after the adoption
of this Section 8.10. Without limiting the generality or the effect of the
foregoing, the Corporation may enter into one or more agreements with any
person, which provide for indemnification greater or different than that
provided in this Section 8.10. No amendment, modification or repeal of this
Article shall adversely affect any right or protection of a Director, officer,
employee or agent that exists at the time of such amendment, modification or
repeal.

                                       23

EX-21

                                                                      EXHIBIT 21


                                 SUBSIDIARIES OF

                               FLOWERS FOODS, INC.




              NAME OF SUBSIDIARY                           JURISDICTION OF INCORPORATION OR ORGANIZATION
              ------------------                           ---------------------------------------------
                                                        
      Flowers Finance, LLC                                                        Delaware

      Flowers Bakeries, LLC                                                       Georgia

      Flowers Bakeries Brands, Inc.                                               Delaware

      Flowers Baking Co. of Opelika, LLC                                          Alabama

      Hardin's Bakery, LLC                                                        Alabama

      Bailey Street Bakery, LLC                                                   Alabama

      Home Baking Company, LLC                                                    Alabama

      Flowers Baking Co. of Texarkana, LLC                                        Arkansas

      Holsum Baking Company, LLC                                                  Arkansas

      Shipley Baking Company, LLC                                                 Arkansas

      Flowers Baking Co. of Florida, LLC                                          Florida

      Flowers Baking Co. of Miami, LLC                                            Florida

      Flowers Baking Co. of Jacksonville, LLC                                     Florida

      Flowers Baking Co. of Bradenton, LLC                                        Florida

      Flowers Baking Co. of Thomasville, LLC                                      Georgia

      Flowers Baking Co. of Villa Rica, LLC                                       Georgia

      Flowers Baking Co. of Tyler, LLC                                            Georgia

      Flowers Bakery of Tucker, LLC                                               Georgia

      Table Pride, LLC                                                            Georgia

      Huval Bakery, LLC                                                          Louisiana

      Bunny Bread, LLC                                                           Louisiana

      Flowers Baking Co. of Baton Rouge, LLC                                     Louisiana

      Flowers Baking Co. of Jamestown, LLC                                     North Carolina



                                                                      
      Franklin Baking Company, LLC                                             North Carolina

      Flowers Baking Co. of Memphis, LLC                                         Tennessee

      Flowers Baking Co. of Morristown, LLC                                      Tennessee

      East Tennessee Baking Co., LLC                                             Tennessee

      West Tennessee Baking Co., LLC                                             Tennessee

      Schott's Bakery, LLC                                                         Texas

      Flowers Baking Co. of Texas, LLC                                             Texas

      Butterkrust Bakery, LLC                                                      Texas

      El Paso Baking Co., LLC                                                      Texas

      El Paso Baking Company de Mexico, S.A. de C.V.                               Mexico

      San Antonio Baking Co., LLC                                                  Texas

      Austin Baking Co., LLC                                                       Texas

      Corpus Christi Baking Co., LLC                                               Texas

      Hampton Roads Baking Company, LLC                                           Virginia

      Flowers Baking Co. of Norfolk, LLC                                          Virginia

      Flowers Baking Co. of Lynchburg, LLC                                        Virginia

      Flowers Baking Co. of West Virginia, LLC                                 West Virginia

      The Donut House, LLC                                                     West Virginia

      Storck Baking Company, LLC                                               West Virginia

      Flowers Snack, LLC                                                          Georgia

      Flowers Snack of Atlanta, LLC                                               Georgia

      Flowers Snack of Crossville, LLC                                           Tennessee

      Flowers Snack Distributors, Inc.                                           Tennessee

      Flowers Snack of London, LLC                                                Kentucky

      Mrs. Smith's Bakeries, LLC                                                  Georgia

      Mrs. Smiths Bakery of Montgomery, LLC                                       Alabama

      Mrs. Smith's Bakeries Sales Support Group, LLC                              Georgia

      Mrs. Smith's Foil Company, LLC                                              Georgia

      Dan-co Bakery, LLC                                                          Georgia

      Mrs. Smith's Bakery of Pembroke, LLC                                     North Carolina

      Mrs. Smith's Bakeries Frozen Distributors, Inc.                             Georgia


      

                                                                      
      Mrs. Smith's Bakery of Suwanee, LLC                                         Georgia

      Mrs. Smith's Bakeries of Pennsylvania, LLC                                  Georgia

      Mrs. Smith's Bakery of Stilwell, LLC                                        Oklahoma

      Flowers Baking Co. of Fountain Inn, LLC                                  South Carolina

      Mrs. Smith's Bakery of Spartanburg, LLC                                  South Carolina

      Mrs. Smith's Brands, Inc.                                                South Carolina

      

EX-99

EX-99 SECTION 906 CERTIFICATION OF THE CEO & CFO