• Achieves record quarterly and annual revenues;
  • Achieves record quarterly and annual operating profits and EPS, before unusual charges;
  • Fourth quarter revenues up 41.5% to $92.1 million on 27.3% volume growth;
  • Fourth quarter EPS, prior to unusual charges, up 14.3% to $0.48;
  • Acquisition of Borden Foods brands successfully completed, after-tax charge of $2.4 million for acquisition-related costs and after-tax extraordinary charge of $1.5 million associated with acquisition financing;
  • Reconfirms EPS guidance for 2002.

American Italian Pasta Company (NYSE: PLB) today announced record results for the quarter and fiscal year 2001 ended September 28, 2001. Revenues for the quarter increased 41.5% to $92.1 million and diluted earnings per share, before unusual charges, increased 14.3% for the fourth quarter to $0.48, in line with First Call analyst consensus estimates. Revenues for the year increased 24.9% to $310.8 million and earnings per share for the year, before unusual charges, increased 15.3% to $1.73. The Company also said it is reconfirming its prior guidance of fully diluted earnings per share for fiscal 2002 in the range of $2.09 to $2.15.

"AIPC delivered an excellent fourth quarter and a superb year," said Timothy S. Webster, President and Chief Executive Officer. "For the quarter we achieved volume growth of 27% and revenue growth of over 40%. If we exclude the impact of the recently acquired brands from Borden Foods, our core volumes grew by 18% and core revenues grew by nearly 25%. This growth in our core businesses was driven by strong performances once again by our private label business, up 24%, and ingredient business, up 31%. We were encouraged by the performance of the Mueller's brand during the quarter as we increased trade marketing spending and have put the transitional challenges we faced earlier in the year largely behind us.

"We achieved strong performance for the quarter in our operations as well. Our manufacturing facilities ran extremely well and we implemented a number of significant changes in logistics strategy. This combination of supply chain activity resulted in significant productivity gains over last year. Operating profit before the acquisition-related charge grew by nearly 30% for the quarter. This was less than our revenue growth rate because the cost profile of the newly acquired brands did not yet reflect the expected synergies from integrating them into our low-cost model. Excluding the unusual charges, profit after taxes was 9.6% of sales for the quarter and 10.1% for the year. We think this is outstanding performance in a year in which we achieved excellent top-line growth and completed two major brand acquisitions."

Webster added, "We continue to gain share in many of the markets that we serve due to our focus on remaining the low cost producer of high-quality pasta. During 2001, we increased our presence in the branded market with two strategic acquisitions. The Mueller's brand acquisition closed in the first fiscal quarter and seven profitable brands were acquired from Borden Foods in the fourth fiscal quarter. We added several major new customers during the year including SuperValu, Super Target and production of ADM's Martha Gooch and LaRosa brands. We opened our Italy plant early in the year, and now boast a customer base that includes Kroger, Wal*Mart, and several other significant customers in the U.S. and Europe. For the year, we achieved outstanding growth from our core businesses, particularly private label -- up 27% for the year -- and ingredient -- up 35% for the year.

"The integration of the brands we acquired from Borden Foods is progressing smoothly. We have successfully completed the sales and distribution phase of the integration and expect to have the manufacturing phase fully completed by December 31, 2001."

Industry Update

"Consumer demand for dry pasta and convenience meals with dry pasta has grown modestly, and average retail prices have been increasing more rapidly," Webster said. "The outlook for the industry has been brightened by several announcements of plant closings by our competitors. Finally, it is important to note that in times of economic uncertainty, consumers appreciate the versatility, low cost, and nutritional benefits of pasta."

Unusual Charges

As previously announced, the Company also recorded two unusual charges in the fourth quarter. The first of these charges, $2.4 million after-tax resulted from acquisition-related costs of the seven pasta brands acquired from Borden Foods. The second was an extraordinary charge, required by accounting rules, to write off unamortized costs of $1.5 million after-tax associated with the previous line of credit following the Company's completion of a new $300 million credit agreement.

Investing in the Market:

Horst W. Schroeder, Chairman of the Board, said, "Over the past several years we have invested heavily in improving our operational infrastructure with new plants, new milling technology and capacity, rebalancing and re- aligning our facilities to match current and future market demand. Our cost structure and product quality have continued to improve. This has put us in a position of financial and competitive strength that we have leveraged by making strategic acquisitions of leading pasta brands. With our growing presence in the branded business, and funded by the tremendous cost synergies we have and will realize, we will increase investments in advertising and consumer promotion spending to build the equity and long-term viability of our brands. These initiatives are consistent with our goal to profitably grow our brands for the long term and not to look at these brands as short term revenue enhancers."

Guidance for Fiscal 2002

The Company also said it is reconfirming its prior guidance of fully diluted earnings per share in the range of $2.09 to $2.15 for fiscal 2002, based on expected revenues of approximately $400 million. The Company provided additional guidance today in a separate release.

Webster added, "We remain committed to our stated goals of averaging 15% to 20% top- and bottom-line growth and believe we can meet these goals in addition to investing in our brands while continuing to drive down costs to enhance our low-cost producer status."

AIPC Honored by Forbes and SYSCO Corporation

For the second consecutive year, AIPC was honored by Forbes magazine as one of Forbes 200 Best Small Companies in America. For the sixth consecutive year, AIPC was selected by SYSCO Corporation as one of its Top 10 Gold Suppliers. "We are delighted with these honors," said Schroeder. "They recognize the performance of our Company, the contributions of our employees, and our leadership in the pasta category."

September 11th

"The tragic events of September 11th and thereafter have affected businesses everywhere and ours is no exception. Since September 11th, we have contributed substantial food to the relief effort, supported our military reserve employees, and increased our asset, people and product safety efforts in the plants," said Webster.

Founded in 1988 and based in Kansas City, Missouri, American Italian Pasta Company is the largest- and the fastest-growing producer and marketer of dry pasta in North America. The Company has four plants that are strategically located in Excelsior Springs, Missouri, Columbia, South Carolina, Kenosha, Wisconsin and Verolanuova, Italy. The Company has approximately 560 employees located in the United States and Italy.

The statements contained in this release regarding guidance for 2002, the Company's top- and bottom-line growth goals for the next three years, future cost reductions, and increased investments in advertising and consumer promotion, are forward-looking and based on current expectations. Actual future results could differ materially from those anticipated by such forward- looking statements. The differences could be caused by a number of factors, included but not limited to our dependence on a limited number of customers for a substantial portion of our revenue, our ability to manage rapid growth, our ability to obtain necessary raw materials and minimize fluctuations in raw material prices, the impact of the highly competitive environment in which we operate, reliance exclusively on a single product category, our limited experience in the branded retail pasta business, our ability to attract and retain key personnel, our ability to cost-effectively transport our products and the significant risks inherent in our recent international expansion. For additional discussion of the principal factors that could cause actual results to be materially different, refer to our Annual Report on Form 10-K dated December 22, 2000, filed by the Company with the Securities and Exchange Commission (Commission file No. 001-13403), any amendments thereto and other matters disclosed in the Company's other public filings. The Company will not update any forward-looking statements in this press release to reflect future events.

                        AMERICAN ITALIAN PASTA COMPANY
                      Consolidated Statements of Income
                   (in thousands, except per share amounts)

                                   Three Months   Three Months
                                     Ended           Ended
                                  September 30,   September 30,
                                      2001            2000        % Change

    Revenues
      Retail                        $67,854         $45,714         48.4%
      Institutional                  24,201          19,353         25.1%
    Total revenues                   92,055          65,067         41.5%

    Cost of goods sold               62,112          46,915            -
    Gross profit                     29,943          18,152         65.0%

                                      32.5%           27.9%

    Selling and marketing expense    11,144           3,964        181.1%
    General and administrative
     expense                          2,523           1,616         56.1%
    Provision for acquisition
     expenses                         3,710               -           N/A
    Operating profit                 12,566          12,572          0.0%

                                      13.7%           19.3%

    Interest expense, net             2,729           1,302        109.6%
    Income before income tax
     expense and extraordinary
     item                             9,837          11,270        -12.7%
    Income tax provision              3,393           4,001        -15.2%
    Income before extraordinary loss  6,444           7,269        -11.3%
    Extraordinary loss, net of tax    1,543               -           N/A
    Net income                       $4,901          $7,269        -32.6%

                                       5.3%           11.2%

    Basic Earnings Per Common Share:
      Net income per common share
       before provision for
       acquisition expenses and
       extraordinary item             $0.51           $0.42         21.4%

      Provision for acquisition
       expenses, net of tax            0.14               -           N/A
      Loss per common share due
       to early extinguishment of
       long-term debt, net of tax      0.09               -           N/A

      Net income per common share     $0.28           $0.42        -33.3%

      Weighted average common
       shares outstanding            17,537          17,151

    Diluted Earnings Per common Share:
      Net income per common share
       before provision for
       acquisition expenses and
       extraordinary item             $0.48           $0.42         14.3%

      Provision for acquisition
       expenses, net of tax            0.13               -           N/A
      Loss per common share due
       to early extinguishment of
      Long-term debt, net of tax       0.08               -           N/A

      Net income per common share     $0.27           $0.42        -35.7%

      Weighted average common
       shares outstanding            18,517          17,356




                        AMERICAN ITALIAN PASTA COMPANY
                      Consolidated Statements of Income
                   (in thousands, except per share amounts)

                                     Year            Year
                                    Ended            Ended
                                 September 30,    September 30,
                                     2001            2000         % Change
    Revenues
      Retail                       $223,321        $177,586         25.8%
      Institutional                  87,468          71,209         22.8%
    Total revenues                  310,789         248,795         24.9%

    Cost of goods sold              213,086         178,810            -
    Gross profit                     97,703          69,985         39.6%

                                      31.4%           28.1%

    Selling and marketing expense    31,844          16,065         98.2%
    General and administrative
     expense                          9,278           6,263         48.1%
    Provision for acquisition
     expenses                         5,537               -           N/A
    Operating profit                 51,044          47,657          7.1%

                                      16.4%           19.2%

    Interest expense, net             8,491           4,777         77.7%
    Income before income
     tax expense and extraordinary
     item                            42,553          42,880         -0.8%
    Income tax provision             14,680          15,426         -4.8%
    Income before extraordinary
     loss                            27,873          27,454          1.5%
    Extraordinary loss, net of tax    1,543               -           N/A
    Net income                      $26,330         $27,454         -4.1%

                                       8.5%           11.0%
    Basic Earnings Per Common Share:
      Net income per common share
       before provision for
       acquisition expenses and
       extraordinary item             $1.81           $1.53         18.3%

      Provision for acquisition
       expenses, net of tax            0.21               -           N/A
      Loss per common share due
       to early extinguishment of
       long-term debt, net of tax      0.09               -           N/A

    Net income per common share       $1.51           $1.53         -1.3%

    Weighted average common
     shares outstanding              17,404          17,895

    Diluted Earnings Per common Share:
      Net income per common share
       before provision for
       acquisition expenses and
       extraordinary item             $1.73           $1.50         15.3%

      Provision for acquisition
       expenses, net of tax            0.20               -           N/A
      Loss per common share due
       to early extinguishment of
       long-term debt, net of tax      0.08               -           N/A

      Net income per common share     $1.45           $1.50         -3.3%

      Weighted average common
       shares outstanding            18,186          18,298


                          AMERICAN ITALIAN PASTA COMPANY
                            Consolidated Balance Sheet
                     (in thousands, except per share amounts)

                                                 September 30,  September 30,
                                                      2001           2000
    Assets
    Current assets:
      Cash and temporary investments                  $5,284         $6,677
      Trade and other receivables                     37,546         27,479
      Prepaid expenses and deposits                    8,024          4,424
      Inventory                                       43,866         28,390
      Deferred income taxes                            3,565          2,989
    Total current assets                              98,285         69,959
    Property, plant and equipment:
      Land and improvements                            8,123          7,159
      Buildings                                       99,548         85,157
      Plant and mill equipment                       269,751        230,383
      Furniture, fixtures and equipment               10,957         10,011
                                                     388,379        332,710
    Accumulated depreciation                         (80,453)       (64,769)
                                                     307,926        267,941
    Construction in progress                          31,236         43,727
    Total property, plant and equipment              339,162        311,668
    Other assets                                     122,696          2,144
    Total assets                                    $560,143       $383,771

    Liabilities and stockholders' equity

    Current liabilities:
      Accounts payable                               $22,416        $12,261
      Accrued expenses                                19,652          8,352
      Income tax payable                                 877            841
      Current maturities of long-term debt             1,559          1,564
    Total current liabilities                         44,504         23,018
    Long-term debt                                   236,783        138,502
    Deferred income taxes                             33,664         23,847
    Commitments and contingencies
    Stockholders' equity:
      Preferred stock, $.001 par value:
       Authorized shares - 10,000,000                     --             --
      Class A common stock, $.001 par value:
       Authorized shares - 75,000,000                     19             18
      Class B common stock, $.001 par value:
       Authorized shares - 25,000,000                     --             --
      Additional paid-in capital                     202,674        177,725
      Treasury stock                                 (34,394)       (31,362)
      Notes receivable from officers                     (61)           (61)
      Unearned compensation                             (223)            --
      Retained earnings                               80,563         54,233
      Accumulated other comprehensive loss            (3,386)        (2,149)
    Total stockholders' equity                       245,192        198,404
    Total liabilities and stockholders' equity      $560,143       $383,771