Aurora Foods Inc. (NYSE: AOR) yesterday announced continued operating-performance improvement with strong sales and unit-volume growth during the second quarter of 2001.

For the three months that ended June 30, 2001, unit volume and net sales increased 3.8% and 2.4%, respectively, compared with year-ago levels. Net sales grew to $219.9 million, led by Log Cabin and Mrs. Butterworth's Syrups (up 18.5%), Duncan Hines (up 8.9%), Celeste Pizza (up 5.8%) and Aunt Jemima Frozen Breakfast (up 4.3%).

Aurora also reported that adjusted EBITDA, or earnings before interest, taxes, depreciation, amortization and other special items, rose 3.6% to $33.5 million versus year-ago levels. The net loss for the quarter narrowed to $9.0 million, or $0.13 per share, a significant improvement compared with the year-ago loss of $18.9 million, or $0.28 per share.

The Company said that EBITDA and net income for the second quarter were negatively affected by an unexpected $4.0 million adjustment in marketing spending, which arose from the discovery at quarter close of a programming error in the Company's promotion spending tracking system. The computer systems have been corrected and all appropriate charges have been reflected in this statement. The Company also said that it could not provide any guidance on the expected second-half EBITDA growth until it completed a detailed analysis of its second six-month business programs with its corrected system, with the possibility of modifying them as necessary. The Company indicated this analysis would take two to three weeks to complete and would provide an update on its second six months at that time.

The Company said that in addition to the $4.0 million marketing spending adjustment, EBITDA for the quarter as compared to target was negatively impacted by net volume declines and unfavorable brand, channel and SKU volume mix, offset by significant reductions in marketing spending.

"The growth trend in net sales, both versus year ago and the first quarter, is a major indicator of the improving health of our business," said James T. Smith, Chairman and Chief Executive Officer of Aurora Foods. "Our brands are much stronger today as evidenced by the fact that seven of our nine brands have higher market shares."

The Company reported that absolute consumer consumption of its brands has successively improved in each of the last four three-month IRI periods, driven, in part, by substantial distribution gains at the retail level. There were especially strong results on Duncan Hines, the Company's largest brand, with major gains on cake mix, frosting and brownies, behind the strategy of building on cake to grow market share on frosting and brownies.

The Company said that despite the $4.0 million marketing spending adjustment, absolute marketing spending was $8.3 million below year ago, behind growing volume, offsetting negative brand, channel and SKU volume mix. Total Company unit volume, excluding Lender's retail, was up 9.0% versus year ago, highlighting the significance of Lender's disappointing performance. "We have learned a great deal about this business over the last six months. We are now even more convinced that the trends in this business are reversible and that Lender's can become a major contributor to the Company's earnings growth," said Mr. Smith. "For starters, we are seeing distribution improvements in each of the last three monthly IRI periods, and second-quarter volume on fresh Lender's was up 20% versus year ago."

The Company also reported that it recorded a net pre-tax gain of $3.1 million related to the receipt of shares from former management in excess of those required to be distributed to class members as part of the May 2001 settlement of shareholder class action claims, as well as the accrual of other legal and consolidation costs. This gain is not included in adjusted EBITDA. Interest expense for the quarter was a net $30.4 million and includes a $4.9 million non-cash charge related to the recognition of a longstanding and now ineffective interest rate hedge under FAS 133. Recognition of this expense in the second quarter will result in lower future recorded interest. Overall, Aurora will continue to benefit from the reduction in market interest rates.

For the six months that ended June 30, 2001, sales rose to $503.5 million, compared with $496.7 million in the same year-ago period, while the net loss was $16.8 million, or $0.24 per share, compared with a net loss of $47.5 million, or $0.71 per share, in 2000.

Finally, the Company indicated that it entered the second half of this year in significantly better financial condition. July unit volume will be at least 10% above year ago, and ending June inventories have been reduced from $124 million year ago to $85 million currently. The inventory reduction temporarily increased per-unit fixed manufacturing costs, but following quarters will benefit from a more normal flow of business through the Company's production facilities.

Attached are Aurora's financial tables for its second quarter 2001 as well as IRI/Nelson dollar-consumption and share trends.

About Aurora Foods Inc.

Aurora Foods Inc., which is based in St. Louis, is a leading producer and marketer of premium branded food products including Duncan Hines® baking mixes, Log Cabin® and Mrs. Butterworth's® syrups, Lender's® bagels, Van de Kamp's® and Mrs. Paul's® frozen seafood, Aunt Jemima® frozen breakfast products, Celeste® frozen pizza and Chef's Choice® skillet meals. Aurora's products can be found in all Retail classes of trade, and Foodservice, and command strong positions in their respective categories and/or markets.

Statements contained in this press release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from the forward-looking statements contained in this release and that may affect the Company's prospects in general are described in the Company's filing with the Securities and Exchange Commission.

                              AURORA FOODS INC.
                                 CONSOLIDATED
                              INCOME STATEMENTS
                      (Dollars and shares in thousands)

                                            Three Months        Ended June 30,
                                               2001                  2000

    Net sales                                $219,898                $214,721
    Cost of goods sold                       (108,904)               (101,458)
      Gross profit                            110,994                 113,263
    Brokerage, distribution and
     marketing expenses:
      Brokerage and distribution              (25,516)                (25,114)
      Trade promotions                        (38,291)                (41,806)
      Consumer marketing                       (4,876)                 (8,293)
        Total brokerage, distribution
          and marketing expenses              (68,683)                (75,213)
    Amortization of goodwill and other
     intangibles                              (11,322)                (10,729)
    Selling, general and administrative
     expenses                                 (15,651)                (12,095)
    Other financial, legal, accounting
     and consolidation expenses                 3,066                 (15,037)
    Transition expenses                            --                     (19)
      Total operating expenses                (92,590)               (113,093)
       Operating income                        18,404                     170
    Interest expense, net                     (30,362)                (27,176)
    Amortization of deferred financing
     expense                                     (867)                   (735)
    Other bank and financing expenses             (37)                   (101)
      Loss before income taxes                (12,862)                (27,842)
    Income tax benefit                          3,864                   8,909
      Net  loss                                (8,998)                (18,933)
    Preferred dividends                          (308)                      --
      Net loss available to
       common stockholders                    $(9,306)               $(18,933)

    Basic and diluted loss per share
     available to common stockholders          $(0.13)                 $(0.28)

    Weighted average number of shares
     outstanding                               72,675                  67,050

    EBITDA (1)                                $36,583                 $17,301

    ADJUSTED EBITDA (2)                       $33,517                 $32,356

    (1) EBITDA represents earnings before interest, taxes, depreciation and
        amortization.
    (2) Adjusted EBITDA represents earnings before interest, taxes,
        depreciation and amortization and before the accounting change, other
        financial, legal accounting and consolidation expenses, and transition
        expenses.

Certain reclassifications have been made to the prior year amounts to conform to the current year presentation.

                              AURORA FOODS INC.
                                 CONSOLIDATED
                              INCOME STATEMENTS
                             (Dollars and shares
                                in thousands)

                                                    Six Months Ended June 30,
                                                 2001                    2000

    Net sales                                $503,490                $496,729
    Cost of goods sold                       (242,838)               (239,860)
       Gross profit                           260,652                 256,869
    Brokerage, distribution and marketing
     expenses:
       Brokerage and distribution             (58,429)                (59,077)
       Trade promotions                       (91,815)                (96,207)
       Consumer marketing                     (23,881)                (26,264)
          Total brokerage, distribution
           and marketing expenses            (174,125)               (181,548)
    Amortization of goodwill and other
     intangibles                              (22,523)                (21,480)
    Selling, general and administrative
     expenses                                 (31,384)                (26,672)
    Other financial, legal, accounting
     and consolidation expenses                 3,066                 (24,638)
    Transition expenses                            --                  (1,384)
          Total operating expenses           (224,966)               (255,722)
       Operating income                        35,686                   1,147
    Interest expense, net                     (58,232)                (51,547)
    Amortization of deferred financing
     expense                                   (1,734)                 (1,443)
    Other bank and financing expenses             (74)                   (188)
       Loss before income taxes and
        cumulative effect of
          change in accounting                (24,354)                (52,031)
    Income tax benefit                          7,599                  16,649
       Net loss before cumulative effect
        of change in accounting               (16,755)                (35,382)
    Cumulative effect of change in
     accounting, net of tax $5,722                 --                 (12,161)
       Net loss                               (16,755)                (47,543)
    Preferred dividends                          (615)                     --
       Net loss available to common
        stockholders                         $(17,370)               $(47,543)

    Basic and diluted loss per share
     available to common stockholders:
       Loss before cumulative effect of
        change in accounting                   $(0.24)                 $(0.53)
       Cumulative effect of change in
        accounting, net of tax                     --                   (0.18)
       Net loss available to common
        stockholders                           $(0.24)                 $(0.71)

    Weighted average number of shares
     outstanding                               73,395                  67,050

    EBITDA (1)                                $71,620                 $35,104

    ADJUSTED EBITDA (2)                       $68,554                 $61,125

    (1) EBITDA represents earnings before interest, taxes, depreciation and
        amortization.
    (2) Adjusted EBITDA represents earnings before interest, taxes,
        depreciation and amortization and before the accounting change, other
        financial, legal accounting and  consolidation expenses, and
        transition expenses.

Certain reclassifications have been made to the prior year amounts to conform to the current year presentation.

                              AURORA FOODS INC.
                                 CONSOLIDATED
                                BALANCE SHEETS
                                (IN THOUSANDS)
                                                   June 30,       December 31,
                                                     2001               2000
    ASSETS:

    Cash & cash equivalents                         $2,710               $525
    Accounts receivable, net                        73,391            121,193
    Accounts receivable sold                       (28,606)           (38,565)
    Inventories                                     84,755            104,319
    Prepaid expenses and other assets               11,841              6,496
    Current deferred tax assets                     18,797             17,133
    Total current assets                           162,888            211,101

    Property, plant and equipment, net             229,585            239,107
    Deferred tax asset                              47,353             40,045
    Goodwill and other intangible assets, net    1,249,140          1,268,942
    Other assets                                    32,219             35,091

    Total assets                                $1,721,185         $1,794,286


    LIABILITIES & STOCKHOLDERS' EQUITY:

    Current portion of senior secured term debt    $32,926            $32,926
    Accounts payable                                47,214             50,456
    Accrued liabilities                             74,387             87,840
    Total current liabilities                      154,527            171,222

    Senior secured term debt                       494,202            510,665
    Senior secured revolving debt facility         146,400            160,000
    Senior subordinated notes                      401,721            401,837
    Other liabilities                               12,122              5,848
    Total liabilities                            1,208,972          1,249,572

    Commitments and contingent liabilities

    Stockholders' equity
    Preferred stock                                     37                 37
    Common stock                                       742                741
    Paid-in capital                                685,359            685,091
    Treasury stock                                 (13,266)                --
    Promissory notes                                  (120)              (227)
    Accumulated deficit                           (158,298)          (140,928)
    Accumulated other comprehensive loss            (2,241)                --
    Total stockholders' equity                     512,213            544,714

    Total liabilities and stockholders' equity  $1,721,185         $1,794,286


                              AURORA FOODS INC.
                                 CONSOLIDATED
                             CASH FLOW STATEMENT
                                (IN THOUSANDS)

                                                   Six Months Ended June 30,
                                                    2001               2000
    Cash from operations:
      Net loss                                   $(16,755)          $(47,543)
      Adjustments to reconcile net loss
       to cash from operations:
      Depreciation and amortization expense        37,552             35,357
      Deferred income taxes                        (7,599)           (16,649)
      Recognition of loss on derivatives            4,901                 --
      Receipt of shares from former management    (15,654)                --
      Recognition of liability to
       shareholder class                           10,000                 --
    Non-cash restructuring cost                        --              3,050
      Cumulative effect of change in
       accounting, net of tax                          --             12,161
      Net loss on sale of fixed assets
       and other, net                                 189                 --
      Changes to operating assets and liabilities:
        Receivables                                47,803             15,999
        Accounts receivable sold                   (9,959)            20,418
        Inventories                                19,564               (659)
        Prepaid expenses and other
         current assets                            (5,330)             9,261
        Accounts payable                           (3,857)           (32,764)
        Accrued expenses                          (20,952)           (30,143)
        Other non-current liabilities              (2,712)              (489)

    Net cash provided by (used in)operations       37,191            (32,001)

    Cash flows from investing activities:
      Asset additions                              (5,269)            (6,973)
      Proceeds from asset sales                        66              1,175
      Changes to other non-current assets
       and liabilities                                 --             (2,497)
      Payment for acquisition of
       businesses                                      --             (7,984)

    Net cash (used for) investment
     activities                                    (5,203)           (16,279)

    Cash (used for) provided by financing
     activities:
      Senior secured revolving
       (repayments) borrowings, net               (13,600)            65,000
      Repayment of borrowings                     (16,462)           (11,517)
      Capital contributions, net of
       officer promissory notes                       259                237
      Debt issuance and equity raising costs           --               (132)

    Net cash (used for) provided by
     financing activities                         (29,803)            53,588

    Net change in cash                              2,185              5,308
    Beginning cash and cash equivalents               525                315

    Ending cash and cash equivalents               $2,710             $5,623


                        Aurora Foods - IRI Consumption
                       % Change in Dollars vs. Year Ago
                               Through 6-10-01

                                                       Total          Total
                                                      Aurora         Aurora
    Past                                              Brands      Excluding
                                                                   Lender's
    3 Months                                           +1.5%          +3.7%
    6 Months                                           +0.5%          +2.4%
    9 Months                                           -2.9%          -1.8%
    12 Months                                          -3.4%          -2.0%


                    Aurora Foods IRI Dollar Market Shares
                               Through 6-10-01

                                       Past            Past          Past
                                   3 Months        9 Months     12 Months

    Van de Kamps                       22.9            22.9          22.3
    Mrs. Paul's                        16.8            16.4          16.3
    TOTAL SEAFOOD                      39.7            39.3          38.6

    Frozen Breakfast                   13.8            13.9          13.9
    Frozen Pizza                        3.3             3.1           3.1
    Skillet Meals                      15.1            13.4          14.2
    Lender's                           29.6            30.4          30.8
    Log Cabin                          15.7            14.6          14.7
    Mrs. Butterworth's                 11.7            10.2          10.7
    TOTAL SYRUPS                       27.4            24.7          25.2

    Duncan Hines                       19.0            17.8          17.5