Exhibit 99.1
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AMERICAN ITALIAN PASTA COMPANY |NEWS
|RELEASE
Contact:
Paul Geist
EVP & Chief Financial Officer
816-584-5611
|  |
For Immediate Release
AMERICAN ITALIAN PASTA COMPANY CONCLUDES SETTLEMENTS
WITH DOJ AND SEC ON HISTORICAL ACCOUNTING PRACTICES
KANSAS CITY, MO, September 15, 2008 - American Italian Pasta Company (AITP.PK),
the largest producer of dry pasta in North America, today announced that it has
entered into separate settlement agreements with the U.S. Attorney for the
Western District of Missouri on behalf of the Department of Justice ("USAO") and
with the U.S. Securities and Exchange Commission ("SEC") to fully resolve the
previously disclosed investigations of the Company relating primarily to
historical accounting and financial reporting that occurred under prior
management.
Under the agreement with the USAO, the Company agreed to acknowledge
responsibility for the conduct of certain former officers and employees, to
continue to cooperate with the USAO, and to pay a monetary penalty of $7.5
million. Under the settlement with the SEC, the Company agreed to a consent
injunction requiring future compliance with federal securities laws. The SEC
settlement involves no monetary penalty against the Company.
Beginning in July 2005, the Board of Directors, through its Audit Committee,
conducted an extensive internal investigation, with the assistance of
independent legal counsel and forensic accounting experts, into the Company's
past accounting practices. Throughout the investigations, the Company cooperated
fully with the government, issued restated financial reports, and instituted
several governance reforms designed to prevent similar accounting and financial
reporting issues from occurring again. In agreeing to the settlements, the U.S.
Attorney and the SEC recognized the cooperation and remediation efforts of the
Company and its Board of Directors.
"Today's announcement brings a welcome close to an unfortunate chapter in the
otherwise proud history of our Company," said Jack Kelly, president and chief
executive officer. "I am extremely grateful to our Board of Directors for their
leadership in addressing this matter in a thorough and proactive manner," added
Kelly, who joined the Company in November 2007 and was appointed the Company's
president and CEO in January 2008. "I also am proud of the meaningful reforms
our new senior management team and employees have implemented over
American Italian Pasta Co.
September 15, 2008
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the last three years to correct the past issues and restore AIPC to sound
governance and financial practices."
Some of the reforms undertaken by the board and senior officers include: the
appointment of a new team of senior leaders with a proven track record of
integrity and business leadership; extensive efforts to significantly improve
financial processes and controls; a restructured ethics policy; and the
establishment of a compliance office.
"These settlements complete the process begun in July, 2005 and enable us to
focus entirely on the future," said Bill Patterson, chairman of the AIPC Board
of Directors. He pointed to milestones in the process, including the settlement
of the federal securities class action lawsuit, the restatement of past
financial reports, and the Company achieving current filing status with the SEC
for its periodic financial reports.
"Our Board, executive team and all of our valued employees continue to
demonstrate, in substantive and important ways, that even when faced with the
toughest challenges, we have the ability and resolve to enhance our value
proposition for customers and shareholders while making AIPC a great place to
work," said Kelly. "We know that AIPC is best served by putting these issues
behind us and allowing the entire organization to fully focus on meeting our
customers' needs and growing our leadership position in the dynamic pasta market
place."
ABOUT AIPC
Founded in 1988 and based in Kansas City, Missouri, American Italian Pasta
Company is the largest producer 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.
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