content: 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 thirty-nine weeks ended September 25, 1999
  
  ( )  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 1-5084
  
                                TASTY BAKING COMPANY
  
                 (Exact name of company as specified in its charter)
  
           Pennsylvania                                23-1145880
  --------------------------------------------------------------------------------
     (State of Incorporation)               (IRS Employer Identification Number)
  
  
             2801 Hunting Park Avenue, Philadelphia, Pennsylvania 19129
  --------------------------------------------------------------------------------
                 (Address of Principal Executive Offices) (Zip Code)
  
  
                                   (215) 221-8500
  --------------------------------------------------------------------------------
                  (Company's Telephone Number, including area code)
  
  Indicate by check mark whether the company (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  company  was
  required  to file  such  reports),  and  (2) has  been  subject  to such  filing
  requirements for the past 90 days.
  
                         Yes X                       No
  
                        APPLICABLE ONLY TO CORPORATE ISSUERS:
  
  Indicate the number of shares  outstanding  of each of the  issuer's  classes of
  common stock, as of the latest practicable date.
  
       Common Stock, par value $.50                       7,822,008
  --------------------------------------------------------------------------------
            (Title of Class)                     (No. of Shares Outstanding
                                                    at November 5, 1999)
  
                   INDEX OF EXHIBITS IS LOCATED ON PAGE 10 OF 11.
  
  
  
                                      1 of 11
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
  
                                        INDEX
  <TABLE>
  <CAPTION>
                                                                                                                      Page
  <S>          <C>                                                                                                    <C>
  PART I.       FINANCIAL INFORMATION
  
  Item 1.       Financial Statements
  
                Consolidated Condensed Balance Sheets
                September 25, 1999 and December 26, 1998................................................................3
  
                Consolidated Condensed Statements of Operations
                Thirteen and Thirty-nine weeks ended
                September 25, 1999 and September 26, 1998...............................................................4
  
                Consolidated Condensed Statements of Cash Flows
                Thirty-nine weeks ended September 25, 1999 and September 26, 1998.......................................5
  
                Notes to Consolidated Condensed Financial Statements....................................................6
  
  Item 2.       Management's Discussion and Analysis of Financial
                Condition and Results of Operations...................................................................7-9
  
  Item 3.       Quantitative and Qualitative Disclosure
                About Market Risk9
  
  PART II.      OTHER INFORMATION
  
  Item 4.       Submission of Matters to a Vote of Security Holders ...................................................10
  
  Item 6.       Exhibits and Reports on Form 8-K.......................................................................10
  
  Signature     .......................................................................................................11
  </TABLE>
  
  
  
                                      2 of 11
  <PAGE>
   PART I. FINANCIAL INFORMATION
   Item 1. Financial Statements
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                        CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (unaudited)
  <TABLE>
  <CAPTION>
  ------------------------------------------------------------------------------------------------------------------------------------
                                                                                      September 25, 1999            December 26, 1998
  ------------------------------------------------------------------------------------------------------------------------------------
   Current assets:
  <S>                                                                                        <C>                            <C>
         Cash                                                                                $ 31,538                       $ 372,871
         Accounts and notes receivable, net of
           allowance for doubtful accounts                                                 21,796,300                      21,214,576
         Inventories:
               Raw materials                                                                3,197,553                       2,673,101
               Work in progress                                                               872,651                         621,459
               Finished goods                                                               1,462,006                       1,412,720
                                                                              --------------------------------------------------------
                                                                                            5,532,210                       4,707,280
         Deferred income taxes, prepayments and other                                       2,942,060                       2,251,425
                                                                              --------------------------------------------------------
               Total current assets                                                        30,302,108                      28,546,152
                                                                              --------------------------------------------------------
   Property, plant and equipment:                                                         168,279,562                     159,419,070
         Less accumulated depreciation                                                    109,270,334                     110,998,936
                                                                              --------------------------------------------------------
                                                                                           59,009,228                      48,420,134
                                                                              --------------------------------------------------------
   Long-term receivables                                                                   10,485,907                      10,851,320
                                                                              --------------------------------------------------------
   Deferred income taxes                                                                   10,452,681                      10,452,681
                                                                              --------------------------------------------------------
   Spare parts inventory and miscellaneous assets                                           3,210,131                       3,436,481
                                                                              --------------------------------------------------------
   Total assets                                                                          $113,460,055                    $101,706,768
                                                                              ========================================================
   Current liabilities:
         Current portion of long-term debt                                               $          -                       $ 273,053
         Current obligations under capital leases                                             178,987                         325,873
         Notes payable, banks                                                               2,400,000                       1,200,000
         Accounts payable                                                                   6,535,962                       4,204,211
         Accrued liabilities                                                                6,886,999                       6,733,029
                                                                              --------------------------------------------------------
            Total current liabilities                                                      16,001,948                      12,736,166
                                                                              --------------------------------------------------------
   Long-term debt, less current portion                                                    17,000,000                      13,500,000
                                                                              --------------------------------------------------------
   Long-term obligations under capital leases,
         less current portion                                                               4,122,683                         261,283
                                                                              --------------------------------------------------------
   Accrued pensions and other liabilities                                                  13,789,653                      12,683,231
                                                                              --------------------------------------------------------
   Postretirement benefits other than pensions                                             18,471,740                      18,160,785
                                                                              --------------------------------------------------------
   Shareholders' equity:
         Common stock                                                                       4,558,243                       4,558,243
         Capital in excess of par value of stock                                           29,773,944                      29,762,210
         Retained earnings                                                                 26,650,549                      27,030,403
                                                                              --------------------------------------------------------
                                                                                           60,982,736                      61,350,856
         Less:
         Treasury stock, at cost                                                           16,401,631                      16,372,219
         Management Stock Purchase Plan
               receivables and deferrals                                                      507,074                         613,334
                                                                              --------------------------------------------------------
                                                                                           44,074,031                      44,365,303
                                                                              --------------------------------------------------------
   Total liabilities and shareholders' equity                                            $113,460,055                    $101,706,768
                                                                              ========================================================
  </TABLE>
  
  
       See accompanying notes to consolidated condensed financial statements.
  
                                       3 of 11
  <PAGE>
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                     (unaudited)
  
  <TABLE>
  <CAPTION>
  ------------------------------------------------------------------------------------------------------------------------------------
                                                               For the Thirteen Weeks Ended          For the Thirty-nine Weeks Ended
                                                           Sept. 25, 1999      Sept. 26, 1998     Sept. 25, 1999       Sept. 26, 1998
  ------------------------------------------------------------------------------------------------------------------------------------
  <S>                                                        <C>                <C>                 <C>                 <C>
   Gross Sales                                               $53,765,048        $57,265,322         $167,680,647        $ 171,359,482
   Less discounts and allowances                             (18,131,163)       (20,441,486)         (55,690,207)         (57,850,544)
                                                        ------------------------------------------------------------------------------
   Net Sales                                                  35,633,885         36,823,836          111,990,440          113,508,938
                                                        ------------------------------------------------------------------------------
   Costs and expenses:
        Cost of sales                                         23,344,953         22,790,068           71,046,258           70,922,137
  
        Depreciation                                           1,726,779          1,656,291            5,418,093            4,996,685
  
        Selling, general and
           administrative                                      9,535,289         10,520,967           30,936,714           32,162,982
  
        Interest expense                                         321,658            183,326              811,838              502,877
  
        Restructure charge                                             -                  -              950,000                    -
  
        Other income, net                                       (306,406)          (339,873)            (984,734)          (1,048,593)
                                                        ------------------------------------------------------------------------------
                                                              34,622,273         34,810,779          108,178,169          107,536,088
                                                        ------------------------------------------------------------------------------
   Income before provision for
        income taxes                                           1,011,612          2,013,057            3,812,271            5,972,850
  
   Provision for income taxes                                    287,571            680,540            1,170,150            1,985,540
                                                        ------------------------------------------------------------------------------
   Income before cumulative effect of a change
        in accounting principle                                  724,041          1,332,517            2,642,121            3,987,310
  
   Cumulative effect of a change in accounting
        principle for start-up costs                                   -                  -             (204,709)                   -
                                                        ------------------------------------------------------------------------------
   Net income                                                  $ 724,041        $ 1,332,517           $2,437,412          $ 3,987,310
                                                        ==============================================================================
  
  
   Average common shares outstanding:
            Basic                                              7,823,546          7,812,542            7,824,782            7,803,583
            Diluted                                            7,847,241          7,925,851            7,878,804            7,958,800
  
   Per share of common stock:
  
   Income before cumulative effect of a change
        in accounting principle:       Basic                       $0.09              $0.17                $0.34                $0.51
                                                        =================   ================   ==================   ==================
                                       Diluted                     $0.09              $0.17                $0.34                $0.50
                                                        =================   ================   ==================   ==================
   Cumulative effect of a change in accounting
        principle for start-up costs:
        Basic and Diluted                                              -                  -               ($0.03)                   -
                                                        =================   ================   ==================   ==================
    Net income:                         Basic                      $0.09              $0.17                $0.31                $0.51
                                                        =================   ================   ==================   ==================
                                       Diluted                     $0.09              $0.17                $0.31                $0.50
                                                        =================   ================   ==================   ==================
  
        Cash dividend                                              $0.12              $0.12                $0.36                $0.36
                                                        =================   ================   ==================   ==================
  </TABLE>
  
       See accompanying notes to consolidated condensed financial statements.
  
                                       4 of 11
  
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                     (unaudited)
  
  <TABLE>
  <CAPTION>
  -------------------------------------------------------------------------------------------------------------------------
                                                                                       For the Thirty-nine Weeks Ended
                                                                                  September 25, 1999    September 26, 1998
  -------------------------------------------------------------------------------------------------------------------------
  <S>                                                                                 <C>               <C>
  Cash flows from (used for) operating activities
        Net income                                                                    $  2,437,412      $  3,987,310
        Adjustments to reconcile net income to net
         cash provided by operating activities:
           Depreciation                                                                  5,418,093         4,996,685
           Amortization                                                                     57,712           133,503
           Cumulative effect of change in accounting principle                             204,709                --
           Other                                                                         1,287,890         1,535,511
        Changes in assets and liabilities
         affecting operations                                                              553,554        (5,262,330)
                                                                                      -------------------------------
  
        Net cash from operating activities                                               9,959,370         5,390,679
                                                                                      -------------------------------
  
  Cash flows from (used for) investing activities
        Purchase of property, plant and equipment                                      (11,922,311)       (8,700,286)
        Proceeds from owner/operators' loan repayments                                   3,383,101         2,431,492
        Loans to owner/operators                                                        (3,020,970)       (2,223,593)
        Other                                                                               33,038             2,288
                                                                                      -------------------------------
  
        Net cash used for investing activities                                         (11,527,142)       (8,490,099)
                                                                                      -------------------------------
  
  Cash flows from (used for) financing activities
        Additional long-term debt                                                        6,000,000         5,500,000
        Dividends paid                                                                  (2,817,266)       (2,810,032)
        Payment of long-term debt                                                       (3,172,405)       (1,431,140)
        Net increase in short-term debt                                                  1,200,000         1,100,000
        Other                                                                               16,110           122,150
                                                                                      -------------------------------
  
        Net cash from financing activities                                               1,226,439         2,480,978
                                                                                      -------------------------------
  
        Net decrease in cash                                                              (341,333)         (618,442)
  
        Cash, beginning of year                                                            372,871           748,117
                                                                                      -------------------------------
  
        Cash, end of period                                                           $     31,538      $    129,675
                                                                                      ===============================
  
  
        Supplemental Cash Flow Information:
        Cash paid during the period for:
           Interest                                                                   $    833,760      $    565,237
                                                                                      ===============================
           Income taxes                                                               $  1,206,479      $  1,512,267
                                                                                      ===============================
        Non-Cash Activity:
           Captial lease obligation                                                   $  4,113,866      $         --
                                                                                      ===============================
  </TABLE>
  
        See accompanying notes to consolidated condensed financial statements
  
                                       5 of 11
  
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
  
  
  1.     Interim Financial Information
         -----------------------------
         In the opinion of management,  the  accompanying  unaudited  consolidated
         condensed  financial  statements  contain all adjustments  (consisting of
         only normal recurring accruals) necessary to present fairly the financial
         position of the company as of  September  25, 1999 and December 26, 1998,
         the results of its  operations  for the  thirteen and  thirty-nine  weeks
         ended  September  25, 1999 and  September 26, 1998 and cash flows for the
         thirty-nine  weeks ended September 25, 1999 and September 26, 1998. These
         unaudited  consolidated  condensed financial statements should be read in
         conjunction  with the  consolidated  financial  statements  and footnotes
         thereto in the company's 1998 Annual Report to Shareholders. In addition,
         the results of operations for the  thirty-nine  weeks ended September 25,
         1999 are not necessarily indicative of the results to be expected for the
         full year.
  
         Certain  expense items are charged to  operations  in the year  incurred.
         However,  for interim  reporting  purposes  the  expenses  are charged to
         operations on a pro-rata basis over the company's accounting periods. For
         the thirteen and Thirty-nine weeks ended September 25, 1999 and September
         26, 1998, the  difference  between the actual  expenses  incurred and the
         expenses charged to operations was not material.
  
  2.     Net Income Per Common Share
         ---------------------------
         Net income per common share is calculated  according to the  requirements
         of Statement of Financial  Accounting  Standards  No. 128 - "Earnings Per
         Share" which requires companies to present basic and diluted earnings per
         share.  Net  income  per  common  share - Basic is based on the  weighted
         average number of common shares  outstanding  during the year. Net income
         per common  share - Diluted is based on the  weighted  average  number of
         common shares and dilutive potential common shares outstanding during the
         year. The company's  dilutive  potential common shares outstanding during
         the year result entirely from dilutive stock options.
  
  3.     Restructure Charge
         ------------------
         During the first  quarter  the  company  discontinued  forty-three  route
         territories   in  those  areas  not  achieving   appropriate   levels  of
         profitability,   assigning   most  of  those   territories   to  regional
         distributorships.  As a result, the company incurred a charge of $950,000
         resulting  in a  reduction  in net income of  $570,570 or $.07 per share,
         primarily  relating  to  costs  associated  with the  repurchase  of some
         owner/operator  territories  as  well as  severance  payments  and  other
         related costs. Substantially all the costs accrued under this charge have
         been satisfied.
  
  4.     Accounting Change
         -----------------
         During  the third  quarter of 1999,  the  company  changed  its method of
         determining the cost of its sugar and packaging  supply  inventories from
         the LIFO  method to the FIFO  method.  The  change was made  because  the
         majority of the company's  peer group uses the FIFO method,  and the LIFO
         method  had been  adopted  when the  company  conducted  business  in two
         different  segments and had  significant  levels of volatile  inventories
         related to the other segment.  Recently,  LIFO  inventories have remained
         relatively  stable or have been  decreasing  and the  calculation of LIFO
         versus  FIFO did not  materially  impact the  financial  statements.  All
         previously reported results have been restated to reflect the retroactive
         application of this accounting  change as required by generally  accepted
         accounting  principles.  The aggregate  effect of this restatement was an
         increase in shareholders'  equity of $264,000.  The accounting change had
         no effect on net income for the  thirteen  and  thirty-nine  weeks  ended
         September 25, 1999 and September 26, 1998.  The effect of this change was
         to increase net income in 1998 by $3,000,  decrease net income in 1997 by
         $20,000 and increase net income in 1996 by $17,000.
  
                                      6 of 11
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
  
  Item 2.       Management's Discussion and Analysis of Financial Condition
                and Results of Operations
                -----------------------------------------------------------
  
  Results of Operations
  ---------------------
  
  For the third  quarter of 1999,  the  company  realized  net income of  $724,041
  versus  $1,332,517 for the third quarter of 1998. Net income per share decreased
  to $.09 from $.17 per share for the comparable quarter of 1998.
  
  Net income for the thirty-nine  weeks ended September 25, 1999 was $2,437,412 or
  $.31 per share. Included in net income for 1999 were two non-recurring  charges.
  During the first quarter the company discontinued  forty-three route territories
  in certain areas not achieving  appropriate  levels of profitability,  assigning
  most of those  territories  to regional  distributorships.  This  resulted in an
  after-tax  charge of  $570,570  or $.07 per  share,  primarily  related to costs
  associated  with the  repurchase of some  owner/operator  territories as well as
  employee  severance  payments and other related costs. The second charge relates
  to the adoption of a new accounting regulation,  which required the write off of
  the remaining  start-up  costs  pertaining to the company's  acquisition of it's
  Oxford facility.  This charge is reflected as a cumulative effect of a change in
  accounting  principle which resulted in an after-tax charge to net income in the
  amount of $204,709 or $.03 per share.  After eliminating the effect of these two
  non-recurring  charges,  the 1999  results  were  $3,212,691  or $.41 per  share
  compared  to  $3,987,310  or $.50 per  share  for the  thirty-nine  weeks  ended
  September 26, 1998.
  
  For the third  quarter,  gross sales were  $53,765,048,  compared to $57,265,322
  last year. Gross sales, less discounts and allowances,  resulted in net sales of
  $35,633,885,  compared to $36,823,836  reported last year. The decrease in gross
  sales  resulted  from the extreme hot weather  conditions.  In  addition,  heavy
  pressures existed from aggressive  promotion on the part of the competition at a
  time when the company was promoting less aggressively. The decrease in net sales
  was mitigated by the decrease in promotional activity and a decrease in returns.
  
  Cost of sales, as a percentage of gross sales, was 43.4% and 39.8% for the third
  quarters of 1999 and 1998, respectively. A portion of the increase is related to
  the  decrease  in sales  volume,  considering  that  certain  fixed  costs are a
  component  of cost of sales.  During  1999,  the company also changed the way it
  allocated  some  expenses  resulting  in a  decrease  in  selling,  general  and
  administrative  expenses  and a  corresponding  increase  in cost of sales.  The
  balance is from  inefficiencies  resulting from the adaptation to new production
  equipment  and the sale of large  cake at a lower  profit  margin  than our core
  products.
  
  Selling,  general  and  administrative  expenses  for the third  quarter of 1999
  decreased  by  $985,678  or 9.4%  compared  to the third  quarter  of 1998.  The
  decrease  resulted from lower  shipping  costs relative to the decrease in sales
  volume,  savings  associated  with the route  restructure  as well as  continued
  efforts to control costs.
  
  Interest  expense  increased  for the third  quarter  of 1999  versus  the third
  quarter of 1998 as a result of increased average borrowing levels.
  
  The effective  tax rate was 28.4% for the quarter  ended  September 25, 1999 and
  33.8% for the  quarter  ended  September  26,  1998 which  compares to a federal
  statutory  rate of 34%.  The  difference  between  the  effective  rate  and the
  statutory  rate in the third  quarters  of 1999 and 1998 was due to low  taxable
  income  compounded  by the effect of state tax  benefits  arising  from  passive
  income.
  
                                      7 of 11
  <PAGE>
  Year 2000 disclosure
  --------------------
  
       The company has been engaged in an ongoing  process to determine the effect
  that the change to the year 2000 (Y2K) will have on operations.  The company has
  completed  an  assessment  of its internal  hardware  and  software  information
  technology  systems and has  determined  that the systems will be Y2K compliant.
  During 1998, all new, Y2K compliant, hardware was installed. New business system
  software is being  installed.  To date,  approximately  60% of the new  business
  system modules have been installed and are  operational.  The remaining  modules
  are  currently  being  installed.  The  company  will end its fiscal year on the
  current  computer  system  and  has,  therefore,  delayed  the  start-up  of the
  remaining  modules  until the  beginning of the new fiscal year.  If the company
  determines that all the modules will not be ready to go live at the beginning of
  the year,  a  contingency  plan is in place.  As a  precaution,  the  company is
  modifying the existing sales order processing and shipping system software to be
  Y2K  compliant.  The company  has tested  these  modifications  and they will be
  installed in the fourth  quarter.  For the new  business  system  software,  the
  software  supplier  has  warranted  that this  system is Y2K  compliant  and the
  company believes that the supplier has done sufficient testing of its product to
  make such a claim.  The decisions to replace these systems were primarily  based
  on the ongoing and expected  future  company and industry  requirements  and the
  inability of the current  applications to meet these  expectations.  The company
  has not accelerated the plans to replace these systems because of the Y2K issue.
  
  The company  utilizes  an  automated  hand-held  sales  order  system  which is,
  however,  not currently Y2K compliant.  The existing system is in the process of
  being  repaired  to bring it into Y2K  compliance.  Repair was  scheduled  to be
  completed in the third quarter, however, scheduling issues moved this time frame
  to the fourth  quarter.  Repair is  proceeding  without  difficulty  and will be
  completed in the fourth quarter.
  
  A committee  was formed to take an  inventory  of all  manufacturing  systems to
  determine Y2K compliance.  The raw ingredient distribution machinery has already
  been corrected to resolve a Y2K problem;  the cost was  immaterial.  The company
  received positive responses to inquiries regarding the Y2K compliance of certain
  manufacturing  equipment  from the  individual  manufacturers  of the equipment.
  There were minor  repairs that had to be made to computers in the  manufacturing
  system  to  prevent  Y2K  complications.  These  repairs  have been made and the
  equipment  has been tested.  The company feels secure that  production  will not
  experience any complications as a result of the change to the year 2000.
  
  The company's Human Resource/Payroll  system required a version upgrade to bring
  the software into Y2K  compliance.  This project was completed  during the third
  quarter of 1999. The cost of the repair was immaterial.
  
  Questionnaires  have been sent to approximately 800 of our vendors and customers
  to  identify  any issues that may impact the company  externally.  To date,  the
  company has received an estimated 75% return  response to these  questionnaires.
  No issues  pertaining  to the year 2000 have been raised with the  responses  we
  have  received  so far.  There are  limitations  to the amount of  reliance  the
  company  can place on the  responses  to these  questionnaires  considering  the
  respondents have to rely on responses from their suppliers and customers. Should
  any  suppliers  have  complications  going  into the year 2000 the  company  has
  alternative suppliers. In the case of major customers, the company does not have
  a single customer whose purchases  exceed 10% of the gross sales of the company.
  If any of these customers were to have complications,  more of the product would
  be sold  through  other  retailers.  Since  ordering  for most  customers in the
  principal  marketing area is accomplished by independent route operators and not
  by the retailer  directly,  any losses in revenues the company would incur would
  not be expected to be material.
  
                                      8 of 11
  <PAGE>
  
  Year 2000 disclosure (continued)
  --------------------------------
  
  To date,  the company has not  incurred  any  significant  costs  related to the
  assessment of, and preliminary efforts in connection with, its Y2K issues. Based
  on the  evaluations to date,  the company does not  anticipate  any  significant
  complications   related  to  Y2K  or  any  significant   costs  to  avoid  those
  complications.
  
       The year 2000  statements set forth above  constitute  "Year 2000 Readiness
  Disclosures" as defined in the Year 2000  Information  and Readiness  Disclosure
  Act of 1998, 15 U.S.C. ss.1, Note.
  
  Financial Condition
  -------------------
  
  The company has  consistently  demonstrated  the ability to generate  sufficient
  cash  flow from  operations.  Bank  borrowings,  under  various  lines of credit
  arrangements, are used to supplement cash flow from operations during periods of
  cyclical shortages.
  
  For the  thirty-nine  weeks ended  September 25, 1999,  net cash from  operating
  activities  increased by $4,568,691 to $9,959,370  from  $5,390,679 for the same
  period  in  1998.  The  increase  over  1998 was due to the  payment  of the IRS
  settlement in the first quarter of 1998,  which was accrued in 1997, an increase
  in accounts payable,  as well as a much smaller increase in accounts  receivable
  in 1999 compared to the same period in 1998.
  
  Net cash used for investing activities for the thirty-nine weeks ended September
  25, 1999 increased by $3,037,043 relative to the same period in 1998 principally
  due to the upgrade of the  bakery's  production  equipment  as a part of a plant
  modernization program.
  
  Net cash from financing activities for the thirty-nine weeks ended September 25,
  1999 decreased by $1,254,539 relative to the same thirty-nine weeks in 1998. The
  decrease  is  primarily  the  result of a net  decrease  in short and  long-term
  borrowings relative to the prior year.
  
  Non Cash Activity  disclosed in Supplemental  Cash Flow Information  refers to a
  capital lease between the company and its Pension Plan("Plan") for its principal
  production  facilities which are owned by the Plan. On July 1, 1999, the company
  exercised the first of five, three-year extension options with the Plan upon the
  expiration  of the  lease's  initial  15 year  term.  As per the  provisions  of
  Statement of Financial Accounting Standards(SFAS) No. 13, as amended by SFAS No.
  98, the company  was  required to revalue its lease with the Plan at the present
  value of the future minimum lease payments over the expected renewal periods. As
  a result,  the values of the asset and  obligation  have been  increased  by the
  amount disclosed.
  
  For  the  remainder  of  1999  the  company  anticipates  that  cash  flow  from
  operations,  along with the continued  availability of bank lines of credit, the
  revolving  credit  agreement  and  other  long-term   financing,   will  provide
  sufficient cash to meet operating and financing requirements.
  
  Item 3. Quantitative and Qualitative Disclosure About Market Risk
          ---------------------------------------------------------
  
       The company has certain  floating  rate debt notes.  Under  current  market
  conditions, the company believes that changes in interest rates would not have a
  material impact on the financial statements of the company. The company also has
  notes receivable from owner operators whose rates adjust every three years, and,
  therefore,  would offset the  fluctuations in the company's  notes payable.  The
  company also has the right to sell these notes  receivable,  and could use these
  proceeds to liquidate a corresponding amount of the debt notes payable.
  
                                      9 of 11
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
  
  PART II.      OTHER INFORMATION
  
  Item 4. Submission of Matters to a Vote of Security Holders
          ---------------------------------------------------
  
       No matters were  submitted to a vote of security  holders  during the third
  quarter of the fiscal year covered by this report.
  
  
  Item 6. Exhibits and Reports on Form 8-K
          --------------------------------
  
  (a)  Exhibits:
                  Exhibit 18 - Preferability Letter
                  Exhibit 27 - Financial Data Schedule
  
  (b)  Reports on Form 8-K
  
                The  company  did  not  file a  report  on  Form  8-K  during  the
  thirty-nine weeks ended September 25, 1999.
  
                                    Exhibit Index
                                    -------------
                        Exhibit 18 - Preferability Letter
                        Exhibit 27 - Financial Data Schedule
  
  
  
  
  
  
  
  
  
  
                                      10 of 11
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
  
                                      SIGNATURE
                                      ---------
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the company
  has duly  caused  this  report  to be signed  on its  behalf by the  undersigned
  thereunto duly authorized.
  
  
  
  
  
                                          TASTY BAKING COMPANY
                                                (Company)
  
  
  
  
  
  
  
  
      November 8, 1999                    /S/ John M. Pettine
          (Date)                          JOHN M. PETTINE
                                       EXECUTIVE VICE PRESIDENT AND
                                         CHIEF FINANCIAL OFFICER
                                 (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
  
  
  
  
  
  
  
                                      11 of 11
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 42118}]
metadata_filer: {"company-data": {"conformed-name": "TASTY BAKING CO", "cik": "0000096412", "assigned-sic": "2050", "irs-number": "231145880", "state-of-incorporation": "PA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-05084", "film-number": "99743309"}, "business-address": {"street1": "2801 HUNTING PARK AVE", "city": "PHILADELPHIA", "state": "PA", "zip": "19129", "phone": "2152218500"}, "mail-address": {"street1": "3413 FOX ST", "city": "PHILADELPHIA", "state": "PA", "zip": "19129"}}
text: 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 thirty-nine weeks ended September 25, 1999
  
  ( )  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 1-5084
  
                                TASTY BAKING COMPANY
  
                 (Exact name of company as specified in its charter)
  
           Pennsylvania                                23-1145880
  --------------------------------------------------------------------------------
     (State of Incorporation)               (IRS Employer Identification Number)
  
             2801 Hunting Park Avenue, Philadelphia, Pennsylvania 19129
  --------------------------------------------------------------------------------
                 (Address of Principal Executive Offices) (Zip Code)
  
                                   (215) 221-8500
  --------------------------------------------------------------------------------
                  (Company's Telephone Number, including area code)
  
  Indicate by check mark whether the company (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  company  was
  required  to file  such  reports),  and  (2) has  been  subject  to such  filing
  requirements for the past 90 days.
  
                         Yes X                       No
  
                        APPLICABLE ONLY TO CORPORATE ISSUERS:
  
  Indicate the number of shares  outstanding  of each of the  issuer's  classes of
  common stock, as of the latest practicable date.
  
       Common Stock, par value $.50                       7,822,008
  --------------------------------------------------------------------------------
            (Title of Class)                     (No. of Shares Outstanding
                                                    at November 5, 1999)
  
                   INDEX OF EXHIBITS IS LOCATED ON PAGE 10 OF 11.
  
                                      1 of 11
  TASTY BAKING COMPANY AND SUBSIDIARIES
  
                                        INDEX
  Page
  PART I.       FINANCIAL INFORMATION
  
  Item 1.       Financial Statements
  
                Consolidated Condensed Balance Sheets
                September 25, 1999 and December 26, 1998................................................................3
  
                Consolidated Condensed Statements of Operations
                Thirteen and Thirty-nine weeks ended
                September 25, 1999 and September 26, 1998...............................................................4
  
                Consolidated Condensed Statements of Cash Flows
                Thirty-nine weeks ended September 25, 1999 and September 26, 1998.......................................5
  
                Notes to Consolidated Condensed Financial Statements....................................................6
  
  Item 2.       Management's Discussion and Analysis of Financial
                Condition and Results of Operations...................................................................7-9
  
  Item 3.       Quantitative and Qualitative Disclosure
                About Market Risk9
  
  PART II.      OTHER INFORMATION
  
  Item 4.       Submission of Matters to a Vote of Security Holders ...................................................10
  
  Item 6.       Exhibits and Reports on Form 8-K.......................................................................10
  
  Signature     .......................................................................................................11
  2 of 11
  PART I. FINANCIAL INFORMATION
   Item 1. Financial Statements
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                        CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (unaudited)
  ------------------------------------------------------------------------------------------------------------------------------------
                                                                                      September 25, 1999            December 26, 1998
  ------------------------------------------------------------------------------------------------------------------------------------
   Current assets:
  Cash                                                                                $ 31,538                       $ 372,871
         Accounts and notes receivable, net of
           allowance for doubtful accounts                                                 21,796,300                      21,214,576
         Inventories:
               Raw materials                                                                3,197,553                       2,673,101
               Work in progress                                                               872,651                         621,459
               Finished goods                                                               1,462,006                       1,412,720
                                                                              --------------------------------------------------------
                                                                                            5,532,210                       4,707,280
         Deferred income taxes, prepayments and other                                       2,942,060                       2,251,425
                                                                              --------------------------------------------------------
               Total current assets                                                        30,302,108                      28,546,152
                                                                              --------------------------------------------------------
   Property, plant and equipment:                                                         168,279,562                     159,419,070
         Less accumulated depreciation                                                    109,270,334                     110,998,936
                                                                              --------------------------------------------------------
                                                                                           59,009,228                      48,420,134
                                                                              --------------------------------------------------------
   Long-term receivables                                                                   10,485,907                      10,851,320
                                                                              --------------------------------------------------------
   Deferred income taxes                                                                   10,452,681                      10,452,681
                                                                              --------------------------------------------------------
   Spare parts inventory and miscellaneous assets                                           3,210,131                       3,436,481
                                                                              --------------------------------------------------------
   Total assets                                                                          $113,460,055                    $101,706,768
                                                                              ========================================================
   Current liabilities:
         Current portion of long-term debt                                               $          -                       $ 273,053
         Current obligations under capital leases                                             178,987                         325,873
         Notes payable, banks                                                               2,400,000                       1,200,000
         Accounts payable                                                                   6,535,962                       4,204,211
         Accrued liabilities                                                                6,886,999                       6,733,029
                                                                              --------------------------------------------------------
            Total current liabilities                                                      16,001,948                      12,736,166
                                                                              --------------------------------------------------------
   Long-term debt, less current portion                                                    17,000,000                      13,500,000
                                                                              --------------------------------------------------------
   Long-term obligations under capital leases,
         less current portion                                                               4,122,683                         261,283
                                                                              --------------------------------------------------------
   Accrued pensions and other liabilities                                                  13,789,653                      12,683,231
                                                                              --------------------------------------------------------
   Postretirement benefits other than pensions                                             18,471,740                      18,160,785
                                                                              --------------------------------------------------------
   Shareholders' equity:
         Common stock                                                                       4,558,243                       4,558,243
         Capital in excess of par value of stock                                           29,773,944                      29,762,210
         Retained earnings                                                                 26,650,549                      27,030,403
                                                                              --------------------------------------------------------
                                                                                           60,982,736                      61,350,856
         Less:
         Treasury stock, at cost                                                           16,401,631                      16,372,219
         Management Stock Purchase Plan
               receivables and deferrals                                                      507,074                         613,334
                                                                              --------------------------------------------------------
                                                                                           44,074,031                      44,365,303
                                                                              --------------------------------------------------------
   Total liabilities and shareholders' equity                                            $113,460,055                    $101,706,768
                                                                              ========================================================
  See accompanying notes to consolidated condensed financial statements.
  
                                       3 of 11
  TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                     (unaudited)
  ------------------------------------------------------------------------------------------------------------------------------------
                                                               For the Thirteen Weeks Ended          For the Thirty-nine Weeks Ended
                                                           Sept. 25, 1999      Sept. 26, 1998     Sept. 25, 1999       Sept. 26, 1998
  ------------------------------------------------------------------------------------------------------------------------------------
  Gross Sales                                               $53,765,048        $57,265,322         $167,680,647        $ 171,359,482
   Less discounts and allowances                             (18,131,163)       (20,441,486)         (55,690,207)         (57,850,544)
                                                        ------------------------------------------------------------------------------
   Net Sales                                                  35,633,885         36,823,836          111,990,440          113,508,938
                                                        ------------------------------------------------------------------------------
   Costs and expenses:
        Cost of sales                                         23,344,953         22,790,068           71,046,258           70,922,137
  
        Depreciation                                           1,726,779          1,656,291            5,418,093            4,996,685
  
        Selling, general and
           administrative                                      9,535,289         10,520,967           30,936,714           32,162,982
  
        Interest expense                                         321,658            183,326              811,838              502,877
  
        Restructure charge                                             -                  -              950,000                    -
  
        Other income, net                                       (306,406)          (339,873)            (984,734)          (1,048,593)
                                                        ------------------------------------------------------------------------------
                                                              34,622,273         34,810,779          108,178,169          107,536,088
                                                        ------------------------------------------------------------------------------
   Income before provision for
        income taxes                                           1,011,612          2,013,057            3,812,271            5,972,850
  
   Provision for income taxes                                    287,571            680,540            1,170,150            1,985,540
                                                        ------------------------------------------------------------------------------
   Income before cumulative effect of a change
        in accounting principle                                  724,041          1,332,517            2,642,121            3,987,310
  
   Cumulative effect of a change in accounting
        principle for start-up costs                                   -                  -             (204,709)                   -
                                                        ------------------------------------------------------------------------------
   Net income                                                  $ 724,041        $ 1,332,517           $2,437,412          $ 3,987,310
                                                        ==============================================================================
  
   Average common shares outstanding:
            Basic                                              7,823,546          7,812,542            7,824,782            7,803,583
            Diluted                                            7,847,241          7,925,851            7,878,804            7,958,800
  
   Per share of common stock:
  
   Income before cumulative effect of a change
        in accounting principle:       Basic                       $0.09              $0.17                $0.34                $0.51
                                                        =================   ================   ==================   ==================
                                       Diluted                     $0.09              $0.17                $0.34                $0.50
                                                        =================   ================   ==================   ==================
   Cumulative effect of a change in accounting
        principle for start-up costs:
        Basic and Diluted                                              -                  -               ($0.03)                   -
                                                        =================   ================   ==================   ==================
    Net income:                         Basic                      $0.09              $0.17                $0.31                $0.51
                                                        =================   ================   ==================   ==================
                                       Diluted                     $0.09              $0.17                $0.31                $0.50
                                                        =================   ================   ==================   ==================
  
        Cash dividend                                              $0.12              $0.12                $0.36                $0.36
                                                        =================   ================   ==================   ==================
  See accompanying notes to consolidated condensed financial statements.
  
                                       4 of 11
  TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                     (unaudited)
  -------------------------------------------------------------------------------------------------------------------------
                                                                                       For the Thirty-nine Weeks Ended
                                                                                  September 25, 1999    September 26, 1998
  -------------------------------------------------------------------------------------------------------------------------
  Cash flows from (used for) operating activities
        Net income                                                                    $  2,437,412      $  3,987,310
        Adjustments to reconcile net income to net
         cash provided by operating activities:
           Depreciation                                                                  5,418,093         4,996,685
           Amortization                                                                     57,712           133,503
           Cumulative effect of change in accounting principle                             204,709                --
           Other                                                                         1,287,890         1,535,511
        Changes in assets and liabilities
         affecting operations                                                              553,554        (5,262,330)
                                                                                      -------------------------------
  
        Net cash from operating activities                                               9,959,370         5,390,679
                                                                                      -------------------------------
  
  Cash flows from (used for) investing activities
        Purchase of property, plant and equipment                                      (11,922,311)       (8,700,286)
        Proceeds from owner/operators' loan repayments                                   3,383,101         2,431,492
        Loans to owner/operators                                                        (3,020,970)       (2,223,593)
        Other                                                                               33,038             2,288
                                                                                      -------------------------------
  
        Net cash used for investing activities                                         (11,527,142)       (8,490,099)
                                                                                      -------------------------------
  
  Cash flows from (used for) financing activities
        Additional long-term debt                                                        6,000,000         5,500,000
        Dividends paid                                                                  (2,817,266)       (2,810,032)
        Payment of long-term debt                                                       (3,172,405)       (1,431,140)
        Net increase in short-term debt                                                  1,200,000         1,100,000
        Other                                                                               16,110           122,150
                                                                                      -------------------------------
  
        Net cash from financing activities                                               1,226,439         2,480,978
                                                                                      -------------------------------
  
        Net decrease in cash                                                              (341,333)         (618,442)
  
        Cash, beginning of year                                                            372,871           748,117
                                                                                      -------------------------------
  
        Cash, end of period                                                           $     31,538      $    129,675
                                                                                      ===============================
  
        Supplemental Cash Flow Information:
        Cash paid during the period for:
           Interest                                                                   $    833,760      $    565,237
                                                                                      ===============================
           Income taxes                                                               $  1,206,479      $  1,512,267
                                                                                      ===============================
        Non-Cash Activity:
           Captial lease obligation                                                   $  4,113,866      $         --
                                                                                      ===============================
  See accompanying notes to consolidated condensed financial statements
  
                                       5 of 11
  TASTY BAKING COMPANY AND SUBSIDIARIES
                NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
  
  1.     Interim Financial Information
         -----------------------------
         In the opinion of management,  the  accompanying  unaudited  consolidated
         condensed  financial  statements  contain all adjustments  (consisting of
         only normal recurring accruals) necessary to present fairly the financial
         position of the company as of  September  25, 1999 and December 26, 1998,
         the results of its  operations  for the  thirteen and  thirty-nine  weeks
         ended  September  25, 1999 and  September 26, 1998 and cash flows for the
         thirty-nine  weeks ended September 25, 1999 and September 26, 1998. These
         unaudited  consolidated  condensed financial statements should be read in
         conjunction  with the  consolidated  financial  statements  and footnotes
         thereto in the company's 1998 Annual Report to Shareholders. In addition,
         the results of operations for the  thirty-nine  weeks ended September 25,
         1999 are not necessarily indicative of the results to be expected for the
         full year.
  
         Certain  expense items are charged to  operations  in the year  incurred.
         However,  for interim  reporting  purposes  the  expenses  are charged to
         operations on a pro-rata basis over the company's accounting periods. For
         the thirteen and Thirty-nine weeks ended September 25, 1999 and September
         26, 1998, the  difference  between the actual  expenses  incurred and the
         expenses charged to operations was not material.
  
  2.     Net Income Per Common Share
         ---------------------------
         Net income per common share is calculated  according to the  requirements
         of Statement of Financial  Accounting  Standards  No. 128 - "Earnings Per
         Share" which requires companies to present basic and diluted earnings per
         share.  Net  income  per  common  share - Basic is based on the  weighted
         average number of common shares  outstanding  during the year. Net income
         per common  share - Diluted is based on the  weighted  average  number of
         common shares and dilutive potential common shares outstanding during the
         year. The company's  dilutive  potential common shares outstanding during
         the year result entirely from dilutive stock options.
  
  3.     Restructure Charge
         ------------------
         During the first  quarter  the  company  discontinued  forty-three  route
         territories   in  those  areas  not  achieving   appropriate   levels  of
         profitability,   assigning   most  of  those   territories   to  regional
         distributorships.  As a result, the company incurred a charge of $950,000
         resulting  in a  reduction  in net income of  $570,570 or $.07 per share,
         primarily  relating  to  costs  associated  with the  repurchase  of some
         owner/operator  territories  as  well as  severance  payments  and  other
         related costs. Substantially all the costs accrued under this charge have
         been satisfied.
  
  4.     Accounting Change
         -----------------
         During  the third  quarter of 1999,  the  company  changed  its method of
         determining the cost of its sugar and packaging  supply  inventories from
         the LIFO  method to the FIFO  method.  The  change was made  because  the
         majority of the company's  peer group uses the FIFO method,  and the LIFO
         method  had been  adopted  when the  company  conducted  business  in two
         different  segments and had  significant  levels of volatile  inventories
         related to the other segment.  Recently,  LIFO  inventories have remained
         relatively  stable or have been  decreasing  and the  calculation of LIFO
         versus  FIFO did not  materially  impact the  financial  statements.  All
         previously reported results have been restated to reflect the retroactive
         application of this accounting  change as required by generally  accepted
         accounting  principles.  The aggregate  effect of this restatement was an
         increase in shareholders'  equity of $264,000.  The accounting change had
         no effect on net income for the  thirteen  and  thirty-nine  weeks  ended
         September 25, 1999 and September 26, 1998.  The effect of this change was
         to increase net income in 1998 by $3,000,  decrease net income in 1997 by
         $20,000 and increase net income in 1996 by $17,000.
  
                                      6 of 11
  TASTY BAKING COMPANY AND SUBSIDIARIES
  
  Item 2.       Management's Discussion and Analysis of Financial Condition
                and Results of Operations
                -----------------------------------------------------------
  
  Results of Operations
  ---------------------
  
  For the third  quarter of 1999,  the  company  realized  net income of  $724,041
  versus  $1,332,517 for the third quarter of 1998. Net income per share decreased
  to $.09 from $.17 per share for the comparable quarter of 1998.
  
  Net income for the thirty-nine  weeks ended September 25, 1999 was $2,437,412 or
  $.31 per share. Included in net income for 1999 were two non-recurring  charges.
  During the first quarter the company discontinued  forty-three route territories
  in certain areas not achieving  appropriate  levels of profitability,  assigning
  most of those  territories  to regional  distributorships.  This  resulted in an
  after-tax  charge of  $570,570  or $.07 per  share,  primarily  related to costs
  associated  with the  repurchase of some  owner/operator  territories as well as
  employee  severance  payments and other related costs. The second charge relates
  to the adoption of a new accounting regulation,  which required the write off of
  the remaining  start-up  costs  pertaining to the company's  acquisition of it's
  Oxford facility.  This charge is reflected as a cumulative effect of a change in
  accounting  principle which resulted in an after-tax charge to net income in the
  amount of $204,709 or $.03 per share.  After eliminating the effect of these two
  non-recurring  charges,  the 1999  results  were  $3,212,691  or $.41 per  share
  compared  to  $3,987,310  or $.50 per  share  for the  thirty-nine  weeks  ended
  September 26, 1998.
  
  For the third  quarter,  gross sales were  $53,765,048,  compared to $57,265,322
  last year. Gross sales, less discounts and allowances,  resulted in net sales of
  $35,633,885,  compared to $36,823,836  reported last year. The decrease in gross
  sales  resulted  from the extreme hot weather  conditions.  In  addition,  heavy
  pressures existed from aggressive  promotion on the part of the competition at a
  time when the company was promoting less aggressively. The decrease in net sales
  was mitigated by the decrease in promotional activity and a decrease in returns.
  
  Cost of sales, as a percentage of gross sales, was 43.4% and 39.8% for the third
  quarters of 1999 and 1998, respectively. A portion of the increase is related to
  the  decrease  in sales  volume,  considering  that  certain  fixed  costs are a
  component  of cost of sales.  During  1999,  the company also changed the way it
  allocated  some  expenses  resulting  in a  decrease  in  selling,  general  and
  administrative  expenses  and a  corresponding  increase  in cost of sales.  The
  balance is from  inefficiencies  resulting from the adaptation to new production
  equipment  and the sale of large  cake at a lower  profit  margin  than our core
  products.
  
  Selling,  general  and  administrative  expenses  for the third  quarter of 1999
  decreased  by  $985,678  or 9.4%  compared  to the third  quarter  of 1998.  The
  decrease  resulted from lower  shipping  costs relative to the decrease in sales
  volume,  savings  associated  with the route  restructure  as well as  continued
  efforts to control costs.
  
  Interest  expense  increased  for the third  quarter  of 1999  versus  the third
  quarter of 1998 as a result of increased average borrowing levels.
  
  The effective  tax rate was 28.4% for the quarter  ended  September 25, 1999 and
  33.8% for the  quarter  ended  September  26,  1998 which  compares to a federal
  statutory  rate of 34%.  The  difference  between  the  effective  rate  and the
  statutory  rate in the third  quarters  of 1999 and 1998 was due to low  taxable
  income  compounded  by the effect of state tax  benefits  arising  from  passive
  income.
  
                                      7 of 11
  Year 2000 disclosure
  --------------------
  
       The company has been engaged in an ongoing  process to determine the effect
  that the change to the year 2000 (Y2K) will have on operations.  The company has
  completed  an  assessment  of its internal  hardware  and  software  information
  technology  systems and has  determined  that the systems will be Y2K compliant.
  During 1998, all new, Y2K compliant, hardware was installed. New business system
  software is being  installed.  To date,  approximately  60% of the new  business
  system modules have been installed and are  operational.  The remaining  modules
  are  currently  being  installed.  The  company  will end its fiscal year on the
  current  computer  system  and  has,  therefore,  delayed  the  start-up  of the
  remaining  modules  until the  beginning of the new fiscal year.  If the company
  determines that all the modules will not be ready to go live at the beginning of
  the year,  a  contingency  plan is in place.  As a  precaution,  the  company is
  modifying the existing sales order processing and shipping system software to be
  Y2K  compliant.  The company  has tested  these  modifications  and they will be
  installed in the fourth  quarter.  For the new  business  system  software,  the
  software  supplier  has  warranted  that this  system is Y2K  compliant  and the
  company believes that the supplier has done sufficient testing of its product to
  make such a claim.  The decisions to replace these systems were primarily  based
  on the ongoing and expected  future  company and industry  requirements  and the
  inability of the current  applications to meet these  expectations.  The company
  has not accelerated the plans to replace these systems because of the Y2K issue.
  
  The company  utilizes  an  automated  hand-held  sales  order  system  which is,
  however,  not currently Y2K compliant.  The existing system is in the process of
  being  repaired  to bring it into Y2K  compliance.  Repair was  scheduled  to be
  completed in the third quarter, however, scheduling issues moved this time frame
  to the fourth  quarter.  Repair is  proceeding  without  difficulty  and will be
  completed in the fourth quarter.
  
  A committee  was formed to take an  inventory  of all  manufacturing  systems to
  determine Y2K compliance.  The raw ingredient distribution machinery has already
  been corrected to resolve a Y2K problem;  the cost was  immaterial.  The company
  received positive responses to inquiries regarding the Y2K compliance of certain
  manufacturing  equipment  from the  individual  manufacturers  of the equipment.
  There were minor  repairs that had to be made to computers in the  manufacturing
  system  to  prevent  Y2K  complications.  These  repairs  have been made and the
  equipment  has been tested.  The company feels secure that  production  will not
  experience any complications as a result of the change to the year 2000.
  
  The company's Human Resource/Payroll  system required a version upgrade to bring
  the software into Y2K  compliance.  This project was completed  during the third
  quarter of 1999. The cost of the repair was immaterial.
  
  Questionnaires  have been sent to approximately 800 of our vendors and customers
  to  identify  any issues that may impact the company  externally.  To date,  the
  company has received an estimated 75% return  response to these  questionnaires.
  No issues  pertaining  to the year 2000 have been raised with the  responses  we
  have  received  so far.  There are  limitations  to the amount of  reliance  the
  company  can place on the  responses  to these  questionnaires  considering  the
  respondents have to rely on responses from their suppliers and customers. Should
  any  suppliers  have  complications  going  into the year 2000 the  company  has
  alternative suppliers. In the case of major customers, the company does not have
  a single customer whose purchases  exceed 10% of the gross sales of the company.
  If any of these customers were to have complications,  more of the product would
  be sold  through  other  retailers.  Since  ordering  for most  customers in the
  principal  marketing area is accomplished by independent route operators and not
  by the retailer  directly,  any losses in revenues the company would incur would
  not be expected to be material.
  
                                      8 of 11
  Year 2000 disclosure (continued)
  --------------------------------
  
  To date,  the company has not  incurred  any  significant  costs  related to the
  assessment of, and preliminary efforts in connection with, its Y2K issues. Based
  on the  evaluations to date,  the company does not  anticipate  any  significant
  complications   related  to  Y2K  or  any  significant   costs  to  avoid  those
  complications.
  
       The year 2000  statements set forth above  constitute  "Year 2000 Readiness
  Disclosures" as defined in the Year 2000  Information  and Readiness  Disclosure
  Act of 1998, 15 U.S.C. ss.1, Note.
  
  Financial Condition
  -------------------
  
  The company has  consistently  demonstrated  the ability to generate  sufficient
  cash  flow from  operations.  Bank  borrowings,  under  various  lines of credit
  arrangements, are used to supplement cash flow from operations during periods of
  cyclical shortages.
  
  For the  thirty-nine  weeks ended  September 25, 1999,  net cash from  operating
  activities  increased by $4,568,691 to $9,959,370  from  $5,390,679 for the same
  period  in  1998.  The  increase  over  1998 was due to the  payment  of the IRS
  settlement in the first quarter of 1998,  which was accrued in 1997, an increase
  in accounts payable,  as well as a much smaller increase in accounts  receivable
  in 1999 compared to the same period in 1998.
  
  Net cash used for investing activities for the thirty-nine weeks ended September
  25, 1999 increased by $3,037,043 relative to the same period in 1998 principally
  due to the upgrade of the  bakery's  production  equipment  as a part of a plant
  modernization program.
  
  Net cash from financing activities for the thirty-nine weeks ended September 25,
  1999 decreased by $1,254,539 relative to the same thirty-nine weeks in 1998. The
  decrease  is  primarily  the  result of a net  decrease  in short and  long-term
  borrowings relative to the prior year.
  
  Non Cash Activity  disclosed in Supplemental  Cash Flow Information  refers to a
  capital lease between the company and its Pension Plan("Plan") for its principal
  production  facilities which are owned by the Plan. On July 1, 1999, the company
  exercised the first of five, three-year extension options with the Plan upon the
  expiration  of the  lease's  initial  15 year  term.  As per the  provisions  of
  Statement of Financial Accounting Standards(SFAS) No. 13, as amended by SFAS No.
  98, the company  was  required to revalue its lease with the Plan at the present
  value of the future minimum lease payments over the expected renewal periods. As
  a result,  the values of the asset and  obligation  have been  increased  by the
  amount disclosed.
  
  For  the  remainder  of  1999  the  company  anticipates  that  cash  flow  from
  operations,  along with the continued  availability of bank lines of credit, the
  revolving  credit  agreement  and  other  long-term   financing,   will  provide
  sufficient cash to meet operating and financing requirements.
  
  Item 3. Quantitative and Qualitative Disclosure About Market Risk
          ---------------------------------------------------------
  
       The company has certain  floating  rate debt notes.  Under  current  market
  conditions, the company believes that changes in interest rates would not have a
  material impact on the financial statements of the company. The company also has
  notes receivable from owner operators whose rates adjust every three years, and,
  therefore,  would offset the  fluctuations in the company's  notes payable.  The
  company also has the right to sell these notes  receivable,  and could use these
  proceeds to liquidate a corresponding amount of the debt notes payable.
  
                                      9 of 11
  TASTY BAKING COMPANY AND SUBSIDIARIES
  
  PART II.      OTHER INFORMATION
  
  Item 4. Submission of Matters to a Vote of Security Holders
          ---------------------------------------------------
  
       No matters were  submitted to a vote of security  holders  during the third
  quarter of the fiscal year covered by this report.
  
  Item 6. Exhibits and Reports on Form 8-K
          --------------------------------
  
  (a)  Exhibits:
                  Exhibit 18 - Preferability Letter
                  Exhibit 27 - Financial Data Schedule
  
  (b)  Reports on Form 8-K
  
                The  company  did  not  file a  report  on  Form  8-K  during  the
  thirty-nine weeks ended September 25, 1999.
  
                                    Exhibit Index
                                    -------------
                        Exhibit 18 - Preferability Letter
                        Exhibit 27 - Financial Data Schedule
  
                                      10 of 11
  TASTY BAKING COMPANY AND SUBSIDIARIES
  
                                      SIGNATURE
                                      ---------
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the company
  has duly  caused  this  report  to be signed  on its  behalf by the  undersigned
  thereunto duly authorized.
  
                                          TASTY BAKING COMPANY
                                                (Company)
  
      November 8, 1999                    /S/ John M. Pettine
          (Date)                          JOHN M. PETTINE
                                       EXECUTIVE VICE PRESIDENT AND
                                         CHIEF FINANCIAL OFFICER
                                 (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
  
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