_________________________________________________________________________
AMERICAN ITALIAN PASTA COMPANY |NEWS
|RELEASE
Contact:
Paul Geist
Vice President & Corporate Controller
816-584-5611
For Immediate Release
|  |
AMERICAN ITALIAN PASTA COMPANY PROVIDES CERTAIN
REVENUE AND LIQUIDITY INFORMATION;
ANNOUNCES RESIGNATION OF CFO;
UPDATES RESTATEMENT TIMETABLE
KANSAS CITY, MO, August 14, 2006 - 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.
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