PLB American Italian Pasta

KANSAS CITY, Mo., Aug. 14 /PRNewswire-FirstCall/ -- American Italian Pasta Company (NYSE:PLB), the largest producer and marketer of dry pasta in North America, today provided certain revenue and liquidity information and commented on industry-wide trends in the durum wheat commodity market. The company also provided updates on its restatement process and announced the resignation of chief financial officer George D. Shadid, who has accepted a position with another company. REVENUE INFORMATION Total revenues were $92.7 million in the third fiscal quarter ended June 30, 2006, increasing 2.8% from $90.2 million in the comparable fiscal quarter in the 2005 fiscal year. Overall volume increased 1.5% during the quarterly period, as compared to the previous fiscal year's quarter. On a year-to-date basis, total revenues were $289.7 million, increasing 0.1% from $289.4 million and overall volume decreased 0.6%. Significant components of revenue performance for the third quarter of fiscal year 2006 and on a year-to- date basis include: Retail revenues: The Company's retail revenues increased by $5.4 million, or 8.4%, as compared to the same quarterly period in the 2005 fiscal year. Retail volume increased during the fiscal quarter by 9.8% as compared to the prior fiscal year quarter. The Company's retail revenues increased by $4.2 million, or 2.0%, as compared to the prior fiscal year-to-date period. Retail volume increased 2.6%, as compared to the prior fiscal year-to-date period. Institutional revenues: The Company's institutional revenues decreased by $2.9 million, or 11.2%, as compared to the same quarterly period in the 2005 fiscal year. Institutional volume declined during the fiscal quarter by 13.8%, as compared to the prior fiscal year quarter. The Company's institutional revenues decreased by $3.9 million, or 5.3%, and institutional volume decreased 7.1%, as compared to the prior fiscal year-to-date period. The Company noted that all historical revenue amounts outlined above are unaudited and are subject to adjustments resulting from the continuing, previously announced Audit Committee investigation. LIQUIDITY Total debt outstanding on June 30, 2006 was $266.8 million. Total debt, net of cash, was $255.3 million at June 30, 2006, compared to $267.5 million as of September 30, 2005. For the nine-month period ended June 30, 2006, the Company's cash outflows included the following items of significance: interest costs of $17.0 million; capital expenditures of $ 7.1 million; professional fees of $5.8 million relating to the audit committee investigation, shareholder litigation and related matters; management consulting fees of $ 6.1 million; and costs associated with the Company's debt refinancing and bank waiver of $7.3 million. During this period when such expenditures were incurred, the Company had sufficient cash generation and liquidity to meet its obligations and, as noted above, reduce its net debt position by $12.2 million. As of August 11, 2006, the Company had total liquidity resources of $40.1 million, consisting of cash on hand of $11.6 million and $28.5 million available under the Company's $30.0 million revolving credit facility. Total debt outstanding on August 11, 2006 was $262.3 million, reflecting net reduction of $4.5 million from June 30, 2006, and total debt, net of cash, was $250.7 million. The Company has recently completed the divestments of the Kenosha, Wis. facility and the Company's specialty pasta brands. The closing of these transactions (which include the sale of certain plant assets, the specialty brands and the related inventory) resulted in the Company generating net cash proceeds (sales price less costs of disposition) of approximately $7.7 million, of which $4.5 million was utilized to reduce the Company's borrowings under its credit facility. DURUM WHEAT MARKET OUTLOOK The Company noted that the current market outlook for durum wheat, which is a significant component of its overall production costs, has been negatively impacted by recent extreme weather conditions during July and August leading up to the current crop harvest. In addition, the market outlook has been impacted by reduced crop plantings during the current crop cycle. The supply of durum wheat and overall crop yields are escalating durum prices for the industry. The Company will be seeking to offset some of this cost inflation through price increases, however, the potential impact on margins and earnings is difficult to predict and dependent on, among other things, the competitive environment. RESIGNATION OF CHIEF FINANCIAL OFFICER Mr. Shadid, who joined AIPC as a consultant in June of 2004 and was appointed CFO in September of that year, has decided to leave the company to accept a position with a privately-held company in the Kansas City area. He will continue with AIPC through September 1, 2006. Paul Geist, vice president and corporate controller, has been appointed principal accounting officer. He and Jeff Johnson, vice president of finance, will report to chief executive officer Jim Fogarty. Mr. Fogarty commented: "We thank George for his service as AIPC has worked to chart a positive course forward and wish him well in his new endeavors. Our audit committee investigation into the company's historic financial statements is in a late stage. We have a talented team in place to ensure a smooth transition in our finance function and to continue our work on the restatement process. In addition, as we continue to make good progress executing on our business plan, a search for a permanent CEO is underway and the timing of this transition should, importantly, allow the company's new CEO to participate in the selection of a new CFO. The AIPC team and I continue to be hard at work implementing our key business initiatives and preparing the company for the future." "American Italian Pasta Company has achieved a number of important milestones in the face of significant challenges," said Mr. Shadid. "AIPC has a team of dedicated and talented employees and I wish the company much success in the future." RESTATEMENT UPDATE The Company noted that it did not file its Form 10-Q for the third fiscal quarter ended June 30, 2006 on the due date of August 9, 2006. As previously disclosed, the Company has also not filed its Form 10-Qs for the first and second fiscal quarters of fiscal 2006 and for the third fiscal quarter of fiscal 2005, as well as its Form 10-K for the fiscal year ended September 30, 2005. The Audit Committee investigation is in a late stage. The Company and the Audit Committee advisors continue to review several issues. The Company currently plans to complete its restatement and re-filing of financial statements by the end of December 2006 and expects to be current in its delinquent filings by the end of the first calendar quarter of 2007. Founded in 1988 and based in Kansas City, Missouri, American Italian Pasta Company is the largest producer and marketer of dry pasta in North America. The Company has four plants that are located in Excelsior Springs, Missouri; Columbia, South Carolina; Tolleson, Arizona and Verolanuova, Italy. The Company has approximately 600 employees located in the United States and Italy. When used in this release, the words "anticipate," "believe," "estimate," and "expect" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying these statements. The statements by the Company regarding the expected revenues for the third fiscal quarter of fiscal year 2006 and the durum wheat outlook are forward- looking. Actual future results or events could differ materially from those anticipated by such forward-looking statements. The differences could be caused by a number of factors, including, but not limited to, the completion and findings of the Audit Committee investigation, the Company's review of its financial statements, a review and/or audit of the Company's financial statements by its independent registered public accounting firm, the SEC staff review, the conclusions reached regarding financial reporting, and the overall durum wheat market and harvest. The Company will not update any forward- looking statements in this press release to reflect future events. DATASOURCE: American Italian Pasta Company CONTACT: Paul Geist, Vice President & Corporate Controller, of American Italian Pasta Company, +1-816-584-5611 Web site: http://www.aipc.com/

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