American Italian Pasta Co – ‘424B1’ on 5/1/98

As of:  Friday, 5/1/98   ·   Accession #:  950123-98-4356   ·   File #:  333-49719

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Prospectus   —   Rule 424(b)(1)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       American Italian Pasta Company                        91    562K 

Document Table of Contents

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                                                Filed pursuant to Rule 424(b)(1)
                                          Registration No. 333-49719

PROSPECTUS                                                                      

5,400,000 Shares
                                                                       AIPC LOGO
American Italian Pasta Company
CLASS A COMMON STOCK
------------------------

OF THE 5,400,000 SHARES OF CLASS A COMMON STOCK BEING OFFERED HEREBY, 1,000,000 
SHARES ARE BEING SOLD BY THE COMPANY AND 4,400,000 SHARES ARE BEING SOLD BY THE 
SELLING STOCKHOLDERS. SEE "PRINCIPAL AND SELLING STOCKHOLDERS." THE COMPANY WILL
NOT RECEIVE ANY OF THE PROCEEDS FROM THE SALE OF SHARES OF CLASS A COMMON STOCK 
BY SUCH SELLING STOCKHOLDERS. OF THE 5,400,000 SHARES OF CLASS A COMMON STOCK 
BEING OFFERED HEREBY, 4,320,000 SHARES ARE BEING OFFERED INITIALLY IN THE UNITED
STATES AND CANADA BY THE U.S. UNDERWRITERS AND 1,080,000 SHARES ARE BEING 
OFFERED INITIALLY OUTSIDE THE UNITED STATES AND CANADA BY THE INTERNATIONAL 
UNDERWRITERS. SEE "UNDERWRITERS." THE CLASS A COMMON STOCK OF THE COMPANY IS
LISTED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL "PLB." ON APRIL 30, 1998,
THE REPORTED LAST SALE PRICE OF THE CLASS A COMMON STOCK ON THE NEW YORK STOCK
EXCHANGE COMPOSITE TRANSACTIONS TAPE WAS $31 PER SHARE. 

------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES 
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. 

------------------------

PRICE $30 A SHARE 
------------------------

                                                        [Enlarge/Download Table]

                                        Underwriting                                   
                           Price to     Discounts and  Proceeds to  Proceeds to Selling
                            Public     Commissions(1)  Company(2)      Stockholders    
                           --------    --------------  -----------  -------------------
                                                                                       
Per Share...............    $30.00         $1.387        $28.613          $28.613      
Total(3)................ $162,000,000    $7,489,800    $28,613,000     $125,897,200    

------------                                                                    

(1) The Company and the Selling Stockholders have agreed to indemnify the       
 Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriters."                 

(2) Before deducting expenses payable by the Company estimated at $710,000. See 
"Underwriters" for additional information relating to the payment of    
expenses in connection with the Offering.                               

(3) Certain Selling Stockholders have granted to the U.S. Underwriters an       
   option, exercisable within 30 days of the date hereof, to purchase up to an
   aggregate of 810,000 additional Shares of Class A Common Stock at the price
 to public less underwriting discounts and commissions, for the purpose of
covering over-allotments, if any. If the U.S. Underwriters exercise such
option in full, the total price to public, underwriting discounts and   
commissions and proceeds to selling stockholders will be $186,300,000,  
   $8,613,270 and $149,073,730, respectively. The Company will not receive any
proceeds from the sale of Shares of Class A Common Stock by the Selling 
  Stockholders. See "Principal and Selling Stockholders" and "Underwriters."

------------------------

The Shares of Class A Common Stock are offered, subject to prior sale,
when, as and if accepted by the Underwriters named herein and subject to        
approval of certain legal matters by Davis Polk & Wardwell, counsel for the     
Underwriters. It is expected that delivery of the Shares of Class A Common Stock
will be made on or about May 6, 1998 at the office of Morgan Stanley & Co.      
Incorporated, New York, N.Y., against payment therefor in immediately available 
funds.                                                                          
------------------------

MORGAN STANLEY DEAN WITTER                                                      
BT ALEX. BROWN                                          
GOLDMAN, SACHS & CO.          
                  GEORGE K. BAUM & COMPANY
April 30, 1998                                                                  

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Picture 

AIPC's Pasta LaBella(R) Branded Pasta 

Picture 

*Muellers(R) is a registered trademark of Bestfoods                             

Products Produced by
AIPC for Bestfoods

Picture 

AIPC's Private Label

and Branded Pasta 

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     NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY  
REFERENCE IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR        
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY,
BY THE SELLING STOCKHOLDERS OR BY ANY UNDERWRITER. THIS PROSPECTUS DOES NOT     
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY   
OTHER THAN THE SHARES OF CLASS A COMMON STOCK OFFERED HEREBY, NOR DOES IT       
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE     
SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS      
UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE     
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREBY SHALL UNDER ANY            
CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY  
DATE SUBSEQUENT TO THE DATE HEREOF.                                             
------------------------
FOR INVESTORS OUTSIDE THE UNITED STATES: NO ACTION HAS BEEN OR WILL BE
TAKEN IN ANY JURISDICTION BY THE COMPANY, BY THE SELLING STOCKHOLDERS OR BY ANY 
UNDERWRITER THAT WOULD PERMIT A PUBLIC OFFERING OF THE CLASS A COMMON STOCK OR  
POSSESSION OR DISTRIBUTION OF THIS PROSPECTUS IN ANY JURISDICTION WHERE ACTION  
FOR THAT PURPOSE IS REQUIRED, OTHER THAN IN THE UNITED STATES. PERSONS INTO     
WHOSE POSSESSION THIS PROSPECTUS COMES ARE REQUIRED BY THE COMPANY, THE SELLING 
STOCKHOLDERS AND THE UNDERWRITERS TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY 
RESTRICTIONS AS TO THE OFFERING OF THE CLASS A COMMON STOCK AND THE DISTRIBUTION
OF THIS PROSPECTUS.                                                             
------------------------
TABLE OF CONTENTS 

                                                                [Download Table]

                                         PAGE
                                         ----
                                             
Additional Information.................    4 
Prospectus Summary.....................    5 
Risk Factors...........................   12 
Use of Proceeds........................   18 
Price Range of Common Stock and              
  Dividend Policy......................   18 
Capitalization.........................   19 
Selected Financial and Other Data......   20 
Management's Discussion and Analysis of      
  Financial Condition and Results of         
  Operations...........................   22 
Business...............................   34 

                                                                [Download Table]

                                         PAGE
                                         ----
                                             
Management.............................   46 
Certain Relationships and Related            
  Transactions.........................   56 
Principal and Selling Stockholders.....   58 
Description of Capital Stock...........   60 
Shares Eligible for Future Sale........   62 
Certain United States Federal Income         
  Tax Considerations for Non-U.S.            
  Holders..............................   64 
Underwriters...........................   67 
Legal Matters..........................   70 
Experts................................   70 
Index to Financial Statements..........  F-1 

------------------------
   This Prospectus contains forward-looking statements and information based
upon assumptions by the Company's management, as of the date of this Prospectus,
including assumptions about risks and uncertainties faced by the Company.       
Readers can identify these forward-looking statements by their use of such verbs
as expects, anticipates, believes or similar verbs or conjugations of such      
verbs. If any of management's assumptions prove incorrect or should             
unanticipated circumstances arise, the Company's actual results could materially
differ from those anticipated by such forward-looking statements. The           
differences could be caused by a number of factors or combination of factors    
including, but not limited to, those factors identified in "Risk Factors"       
beginning on page 12. This report has been filed with the Securities and        
Exchange Commission (the "SEC" or the "Commission") in Washington, D.C. and can 
be obtained by contacting the SEC's public reference operations or obtaining it 
through the SEC's web site on the World Wide Web at http://www.sec.gov. Readers 
are strongly encouraged to consider those factors when evaluating any such      
forward-looking statement. The Company undertakes no obligation to update any   
forward-looking statements in this Prospectus to reflect future events or       
developments.                                                                   
------------------------
The Company holds a number of federally registered and common law     
trademarks, which are used throughout this Prospectus. The Company has          
registered the following marks with the U.S. Patent and Trademark Office: AIPC  
American Italian Pasta Company(R), Pasta LaBella(R), and Montalcino(R). The     
Company also has pending trademark applications with the U.S. Patent and        
Trademark Office for the following marks: Calabria(TM) and Heartland(TM).       
Additionally, a number of federally registered trademarks are used throughout   
this Prospectus that are not owned by the Company. Mueller's(R) is a registered 
trademark of Bestfoods, formerly CPC International Inc. ("Bestfoods"). San      
Giorgio(R) and Ronzoni(R) are registered trademarks of Hershey Foods Corporation
("Hershey"). Prince(R) and Creamette(R) are registered trademarks of Borden     
Foods Holdings Corporation ("Borden").                                          
------------------------

   CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE CLASS A COMMON   
STOCK. SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THIS    
OFFERING, AND MAY BID FOR, AND PURCHASE, SHARES OF THE CLASS A COMMON STOCK IN  
THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITERS."     

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ADDITIONAL INFORMATION

The Company has filed a Registration Statement with the Securities and
Exchange Commission (the "Commission") on Form S-1 under the Securities Act with
respect to the shares of Class A Common Stock offered hereby. This Prospectus,  
which constitutes a part of the Registration Statement, does not contain all of 
the information set forth in the Registration Statement, certain items of which 
are contained in schedules and exhibits to the Registration Statement as        
permitted by rules of the Commission. For further information with respect to   
the Company and the Class A Common Stock offered hereby, reference is made to   
such Registration Statement and the exhibits and schedules thereto. Statements  
contained in this Prospectus as to the contents of any contract or any other    
document referred to are not necessarily complete. With respect to each such    
contract or other document filed as a part of or otherwise incorporated in the  
Registration Statement, reference is made to the exhibit for a more complete    
description of the matters involved, and each such statement shall be deemed    
qualified in its entirety by such reference.                                    

    The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance        
therewith files reports, proxy statements and other information with the        
Commission. The Registration Statement, including the schedules and exhibits    
thereto, as well as such reports, proxy statements and other information filed  
by the Company can be inspected, without charge, and copied at the public       
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices      
maintained by the Commission at Suite 1400, Citicorp Center, 500 West Madison   
Street, Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New   
York, New York 10048. Copies of such materials can also be obtained from the    
Public Reference Section of the Commission, Room 1024, Judiciary Plaza, 450     
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,   
registration statements and certain other filings made with the Commission      
through its Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system  
are publicly available through the Commission's site on the Internet's World    
Wide Web, located at http://www.sec.gov. The Registration Statement, including  
all exhibits thereto and amendments thereof, has been filed with the Commission 
through EDGAR. The Class A Common Stock is listed on the New York Stock Exchange
and copies of such materials may also be inspected and copied at the offices of 
the New York Stock Exchange, 20 Broad Street, New York, New York 10015.         

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PROSPECTUS SUMMARY

   The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and Financial Statements,    
including the Notes thereto, appearing elsewhere in this Prospectus. Unless     
otherwise indicated, all references in this Prospectus to (i) the "Company" and 
"AIPC" shall mean American Italian Pasta Company, a Delaware corporation, and   
its predecessor unless the context otherwise requires; and (ii) "pasta" shall   
mean dry pasta, including dry pasta used in shelf-stable, frozen and canned     
pasta products. Unless otherwise indicated, all information in this Prospectus  
assumes the U.S. Underwriters' over-allotment option is not exercised.          

THE COMPANY 

OVERVIEW                                                                        

 AIPC is the second largest and one of the fastest-growing producers and
marketers of pasta in North America. The Company commenced operations in 1988   
with the North American introduction of new, highly-efficient durum wheat       
milling and pasta production technology. Management believes that the Company's 
singular focus on pasta, vertically-integrated facilities, continued            
technological improvements and development of a highly-skilled workforce enable 
AIPC to produce high-quality pasta at costs below those of many of its          
competitors. Management believes that the combination of the Company's cost     
structure, the average age of its competitors' North American pasta production  
equipment and the growing pasta consumption in North America creates significant
opportunities for continued growth. The Company's revenue and operating income  
were $135.1 million and $20.7 million, respectively, for the twelve-month period
ended December 31, 1997, and grew at compound annual growth rates ("CAGR") of   
30% and 33%, respectively, over the five-year period ended December 31, 1997.   

    The Company has rapidly established a significant market presence in North
America by developing strategic customer relationships with food industry       
leaders that have substantial pasta requirements. North American pasta          
consumption exceeded 5.0 billion pounds in 1996 and is expected to grow based on
industry and trade sources and the Company's own analysis. The Company has a    
long-term supply agreement with Sysco Corporation ("Sysco"), the nation's       
largest marketer and distributor of foodservice products. AIPC is now the       
exclusive producer of Mueller's(R) pursuant to a long-term manufacturing and    
distribution agreement with Bestfoods, formerly CPC International Inc.          
("Bestfoods"). AIPC is also the primary supplier of pasta to Sam's Wholesale    
Club ("Sam's Club"), the largest club store chain in the United States, and     
supplies private label and branded pasta to six of the 10 largest grocery       
retailers in the United States, including Wal*Mart, A&P, Publix, Albertsons,    
American Stores and Winn-Dixie. In recent months, the Company has added several 
new customers including Harris Teeter, Spartan, Meijer and Ahold/Finast. In     
addition, AIPC has developed supply relationships with industrial users of      
pasta, such as Pillsbury, General Mills and Kraft Foods which use the Company's 
pasta as an ingredient in branded food products.                                

The Company produces more than 80 dry pasta shapes in two             
vertically-integrated production and distribution facilities, strategically     
located in Excelsior Springs, Missouri and Columbia, South Carolina. The        
construction of the Missouri plant in 1988 represented the first use in North   
America of a vertically-integrated, high-capacity pasta plant using Italian     
pasta production technology. Management believes that this plant continues to be
among the most efficient and highly-automated pasta facilities in North America.
The South Carolina plant, which commenced operations in 1995, produces only     
pasta shapes conducive to high-volume production and employs a highly-skilled,  
self-managed workforce. The Company recently completed a significant portion of 
its capital expenditure program initiated in 1997 which increased the Company's 
annual pasta production capacity to approximately 500 million pounds and added a
highly-automated durum wheat mill to its South Carolina plant. Management       
believes the South Carolina plant is now the largest and most efficient pasta   
producing facility in North America in terms of productivity and conversion cost
per pound. The Company anticipates that the planned additional capacity         
expansion at the Missouri facility, including new high-speed, high-output pasta 
production lines and expansion of its distribution facility, will be completed  
by June 1998. This expansion will increase the Company's annual production      
capacity to more than 600 million pounds.                                       
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PROPOSED HARVEST STATES ALLIANCE                                                

In November 1997, the Company announced a letter of intent with Amber 
Milling Company, a division of Harvest States Cooperatives ("Harvest States"),  
one of the largest agribusiness cooperatives in the United States. The proposed 
business arrangement contemplates AIPC constructing a highly efficient,         
state-of-the-art pasta production facility adjacent to Harvest States' recently 
constructed wheat mill in Kenosha, Wisconsin. Under the terms of the            
contemplated arrangement, Harvest States would transfer to AIPC the land and    
infrastructure for the facility and supply semolina and other raw materials to  
the proposed plant under a long-term supply agreement. AIPC anticipates the     
proposed facility would initially target the growing industrial pasta market.   
The Company estimates it would invest approximately $30 million in capital      
expenditures to construct the facility, with a targeted annual capacity of      
approximately 150 million pounds. The Harvest States alliance is subject to     
final negotiations and agreement, several pre-conditions and board of directors'
approval from both parties prior to July 1, 1998. There can be no assurance that
a definitive agreement will be reached or that, if reached, the Company will be 
able to implement successfully the Harvest States alliance. See "Risk Factors --
Failure to Implement Harvest States Alliance."                                  

Management believes the Harvest States alliance would create strategic
advantages by: (i) accelerating the time line for constructing a third facility 
targeting the growing industrial pasta market; (ii) creating highly efficient   
capacity to support future growth; (iii) providing long-term access to the      
variety of raw materials needed to support the industrial pasta market (several 
of which AIPC cannot produce currently in its durum semolina mills); (iv) making
available rail and highway infrastructure allowing for efficient distribution to
AIPC's customers; and (v) providing access to Harvest States' durum wheat       
origination network, which is the largest in the United States, and handles over
50% of U.S. durum wheat. The Harvest States alliance would expand AIPC's        
vertical integration strategy to Harvest States' Kenosha mill, one of North     
America's newest and most efficient mills. Additionally, Harvest States' Kenosha
mill uses the same high-quality, state-of-the-art milling equipment and         
technology as AIPC's existing mills, ensuring product consistency for existing  
customers.                                                                      

OPERATING STRATEGY                                                              

   The Company's operating strategy is to grow revenues and profitability by
offering customers the highest quality pasta products at competitive prices with
superior customer service. Key elements of the Company's operating strategy are 
to:                                                                             

          - Continue to Lead the Industry as a Low Cost Producer of High Quality
    Pasta. AIPC has successfully implemented production and capital investment
strategies designed to achieve low-cost production of high-quality    
    products. AIPC has distinguished itself from most major pasta producers by
     vertically integrating the durum wheat milling function with the production
 process and strategically locating its distribution centers. Management
    believes that its facilities are among the most efficient pasta production
  facilities in North America in terms of productivity and conversion cost
  per pound, and that its vertically-integrated processes produce pasta of
 superior color, texture, flavor and consistency. The Company expects to
 realize additional operating efficiencies through the current expansion
programs at its existing facilities, and ongoing improvement programs.

  - Expand Customer-Driven Strategy. The Company is committed to
   developing and maintaining strategic relationships with customers who (i)
  are food industry leaders requiring a significant volume of high-quality
   pasta; (ii) have committed marketing and sales resources to growing their
pasta business; and (iii) pursue long-term supplier relationships. The
 Company has followed this strategy since commencing operations in 1988,
    beginning with an agreement with Sysco, and has developed strategic supply
 relationships with Bestfoods, Sam's Club and leading grocery retailers.
   Management believes that these strategic relationships increase sales and
 operating efficiencies, facilitate AIPC's investment in new technology,
create distribution synergies, and enable closer involvement in its   
customers' pasta businesses.                                          

          - Provide Superior Customer Service. The Company develops and enhances
    customer relationships by providing superior service and technical support
to its customers. The Company has invested heavily in                 
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  the development of a broad range of customer service programs, including
     electronic data interchange ("EDI") and efficient consumer response ("ECR")
   which streamline the order, invoicing and inventory management functions.
The Company provides marketing, technical and service support to its  
customers by assisting customers with supply and category management  
decisions, producing pasta to its customers' specifications and making
   operational recommendations to its customers using pasta as an ingredient
in their food products.                                               

GROWTH STRATEGY                                                                 

     The Company continues to implement its growth strategy, which builds on the
Company's operating strategy and industry trends. Key elements of the Company's 
growth strategy are to:                                                         

        - Continue Bestfoods Business Expansion. The Company was selected in
    1997 to be the exclusive producer of Bestfoods' Mueller's brand pasta, the
 largest pasta brand in North America, and has transferred production of
 substantially all of Mueller's primarily to its recently expanded South
 Carolina facility. Management believes that the Company's experience in
  servicing large pasta supply agreements and its current expansion of its
South Carolina and Missouri milling, pasta production and distribution
    facilities will enable AIPC to support potential future growth. Management
anticipates Bestfoods' annual volume requirement will represent an    
approximately 60% increase over the Company's fiscal 1997 production  
volume.                                                               

    - Obtain Additional Private Label Volume. The Company intends to
continue to grow its existing private label customer volume and secure
     additional private label customers by continuing to offer quality products,
 competitive pricing, category management and superior customer service.
   Management believes that AIPC's prospects for growth in the private label
market have been enhanced since Borden Foods Holdings Corporation     
("Borden"), historically the largest private label supplier in North  
America, discontinued its private label pasta business in 1997.       

       - Increase Sales to Industrial Customers. The Company believes that
     industrial users of pasta will continue to require increasing quantities of
   pasta and that a greater portion of these requirements will be outsourced
     to more efficient producers of high-quality pasta, such as AIPC. Management
    has identified additional strategic opportunities with industrial users of
   pasta which may result in incremental growth, new product development and
   cost savings opportunities in the future. See "-- Proposed Harvest States
Alliance."                                                            

        - Continue Product Innovation. In 1995, the Company introduced Pasta
     LaBella flavored pasta, a line of all natural, full-flavored pasta products
   utilizing patented flavoring technology and AIPC's proprietary production
process. In addition to pursuing increased sales with institutional   
     customers, the Company is exploring potential sales and marketing alliances
  to expand retail distribution of Pasta LaBella flavored pasta. AIPC also
  intends to continue assisting its customers with innovative products and
    packaging, and the development of additional value-added products intended
to generate higher sales values and margins than traditional pasta    
products.                                                             

RECENT DEVELOPMENTS                                                             

On April 3, 1998, AIPC completed its second fiscal quarter. For the   
three-month period ended March 31, 1998, the Company reported net income of $.23
per share assuming dilution. Revenues for the three-month period ended March 31,
1998 increased $13.9 million, or 43.3%, to $46.0 million, from $32.1 for the    
three-month period ended March 31, 1997. Gross profit for the three-month period
ended March 31, 1998 also increased $2.7 million, or 32.1%, to $11.1 million,   
from $8.4 million for the three-month period ended March 31, 1997, which was    
generally related to the growth in revenues. The gross margin percentage for the
three-month period ended March 31, 1998 decreased to 24.1% from 26.2% for the   
three-month period ended March 31, 1997. The expected decrease was primarily due
to changes in sales mix, specifically, the lower gross margin on Bestfoods      
Mueller's pasta sales, plant expansion costs and higher durum wheat costs.      
Operating profit for the three-month period ended March 31, 1998 increased $2.4 
million, or 54.5%, to $6.8 million, from $4.4 million for the three-month period
ended March 31, 1997. Second quarter operating profit as a                      
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percentage of revenues improved to 14.8%, a 1.1% gain over the second quarter of
1997. These improvements reflect the gross profit gains and the absence of      
product introduction costs, which were $.6 million in the three-month period    
ended March 31, 1997. See "Management's Discussion and Analysis of Financial    
Condition and Results of Operations."                                           

OWNERSHIP 

     As of the date of this Prospectus, The Morgan Stanley Leveraged Equity Fund
II, L.P. ("MSLEF"), Morgan Stanley Capital Partners III, L.P. and certain       
affiliated funds (the "MSCP Funds" and with MSLEF, the "Morgan Stanley          
Stockholders") own approximately 32.5% of the outstanding Common Stock. Upon    
consummation of the Offering, the Morgan Stanley Stockholders will own          
approximately 7.8% of the outstanding Common Stock (3.4% if the U.S.            
Underwriters' over-allotment option is exercised). See "Principal and Selling   
Stockholders" and "Underwriters." Shares of Class A Common Stock held by the    
Morgan Stanley Stockholders and certain related persons are, in certain         
circumstances, convertible into an equal number of shares of Class B non-voting 
common stock, par value $.001 per share, of the Company ("Class B Common Stock")
and vice versa. See "Description of Capital Stock -- General."                  

THE OFFERING

                                                        [Enlarge/Download Table]
                                                                                           
Class A Common Stock offered by:                                                           
  The Company................................ 1,000,000 shares                             
  The Selling Stockholders................... 4,400,000 shares(1)                          
                                              ---------------------------------------------
     Total................................... 5,400,000 shares                             
                                              =============================================
Class A Common Stock offered in:                                                           
  U.S. Offering.............................. 4,320,000 shares                             
  International Offering..................... 1,080,000 shares                             
                                              ---------------------------------------------
     Total................................... 5,400,000 shares                             
                                              =============================================
Common Stock outstanding after the            17,978,680 shares(2)                         
  Offering...................................                                              
Use of proceeds.............................. The net proceeds to the Company from the     
                                              Offering will be used to repay a portion of  
                                              its indebtedness under its credit facility   
                                              (the "Credit Facility") and for general      
                                              corporate purposes. The Company will not     
                                              receive any proceeds from the sale of Class A
                                              Common Stock by any Selling Stockholder. See 
                                              "Use of Proceeds."                           
New York Stock Exchange Symbol............... PLB                                          

---------------                                                                 
(1) Of such shares, 4,048,738 shares are being offered by The Morgan Stanley    
   Stockholders, 150,000 shares are being offered by Thompson Holdings, L.P.
    ("Thompson Holdings"), a limited partnership of which Richard C. Thompson,
   a director of the Company, is the only limited partner, 90,631 shares are
 being offered by each of Horst W. Schroeder, Chairman of the Board, and
Timothy S. Webster, President and Chief Executive Officer, and 20,000 
    shares are being offered by Norman F. Abreo. The shares offered by Messrs.
 Schroeder, Webster and Abreo were recently acquired by them pursuant to
    exercises of stock options under the Company's 1992 Stock Option Plan. The
Morgan Stanley Stockholders, Thompson Holdings and Messrs. Schroeder, 
Webster and Abreo are sometimes referred to herein as the "Selling    
 Stockholders." Such shares do not include up to 810,000 shares that may
sold by the Selling Stockholders pursuant to the exercise of the U.S. 
Underwriters' over-allotment option. See "Principal and Selling       
Stockholders."                                                        

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(2) Assumes the U.S. Underwriters' over-allotment option will not be exercised. 
 Does not include 1,976,402 shares of Class A Common Stock issuable upon
  exercise of stock options granted under the Company's three stock option
plans, of which options to purchase 1,445,394 shares are currently    
    outstanding but not exercisable and options to purchase 531,008 shares are
currently outstanding and exercisable. See "Management -- Stock Option
Plans."                                                               

RISK FACTORS

See "Risk Factors" for a discussion of certain factors that should be 
considered in evaluating an investment in the Class A Common Stock.             

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SUMMARY FINANCIAL AND OPERATING DATA

     The summary statement of operations data for the fiscal year ended December
31, 1995, the nine-month fiscal period ended September 30, 1996 and the fiscal  
year ended September 30, 1997 are derived from, and are qualified by reference  
to, the audited Financial Statements of the Company, and Notes thereto, included
elsewhere in this Prospectus. The summary statement of operations data for the  
fiscal years ended December 31, 1993 and 1994 have been derived from audited    
Financial Statements of the Company not included herein. The summary statement  
of operations data for the twelve-month period ended September 30, 1996, and the
three-month periods ended December 31, 1996 and 1997, and the balance sheet data
as of December 31, 1997 have been derived from the Company's unaudited financial
statements which, in the opinion of management, have been prepared on the same  
basis as the audited financial statements and reflect all adjustments           
(consisting of normal recurring adjustments) necessary for a fair presentation  
of the Company's results of operations and financial position for such periods  
and as of such dates. The statement of operations data of the Company for the   
twelve-month period ended September 30, 1996 are included herein only for       
comparison purposes. In 1996, the Company changed its fiscal year end from      
December 31 to the last Friday of September or the first Friday of October. This
change resulted in a nine-month fiscal period ended September 30, 1996, a       
53-week year for fiscal 1997, and a 52- or 53-week year for all subsequent      
fiscal years. The Company's first three fiscal quarters end on the Friday last  
preceding December 31, March 31, and June 30 of each year. For purposes of this 
Prospectus, the 1996 fiscal year is described as the nine-month fiscal period   
ended September 30, 1996. The following summary financial and operating data    
should be read in conjunction with "Management's Discussion and Analysis of     
Financial Condition and Results of Operations," and the Financial Statements of 
the Company, including the Notes thereto, appearing elsewhere in this           
Prospectus.                                                                     

                                                        [Enlarge/Download Table]

                                                                  NINE-MONTH                                  
                                        FISCAL YEAR ENDED        FISCAL PERIOD   TWELVE-MONTH     FISCAL YEAR 
                                          DECEMBER 31,               ENDED       PERIOD ENDED        ENDED    
                                   ---------------------------   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                    1993      1994      1995         1996            1996            1997     
                                   -------   -------   -------   -------------   -------------   -------------
                                                                                  (UNAUDITED)                 
                                              (IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)           
                                                                                                              
STATEMENT OF OPERATIONS DATA:                                                                                 
Revenues.........................  $47,872   $69,465   $92,903      $92,074        $121,149        $129,143   
Cost of goods sold...............   35,081    54,393    73,851       68,555          91,230          93,467   
Plant expansion                                                                                               
 costs (1).......................    1,171       484     2,065           --              --              --   
                                   -------   -------   -------      -------        --------        --------   
Gross profit.....................   11,620    14,588    16,987       23,519          29,919          35,676   
Selling and marketing expense,                                                                                
 including product introduction                                                                               
 costs (2).......................    2,883     3,792     5,303       16,798          18,445          13,664   
General and administrative                                                                                    
 expense.........................    2,049     1,951     2,930        2,805           3,686           3,766   
                                   -------   -------   -------      -------        --------        --------   
Operating profit.................    6,688     8,845     8,754        3,916           7,788          18,246   
Interest expense, net............    3,210     4,975     8,008        8,023          10,770          10,119   
                                   -------   -------   -------      -------        --------        --------   
Income (loss) before income tax                                                                               
 and extraordinary loss..........    3,478     3,870       746       (4,107)         (2,982)          8,127   
Income tax.......................   (3,221)    1,484       270       (1,556)         (1,139)          3,070   
                                   -------   -------   -------      -------        --------        --------   
Income (loss) before                                                                                          
 extraordinary loss..............    6,699     2,386       476       (2,551)         (1,843)          5,057   
Extraordinary loss, net of income                                                                             
 tax (3).........................       --       204        --        1,647           1,647              --   
                                   -------   -------   -------      -------        --------        --------   
Net income (loss)................  $ 6,699   $ 2,182   $   476      $(4,198)       $ (3,490)       $  5,057   
                                   =======   =======   =======      =======        ========        ========   
Pro forma net income (loss)                                                                                   
 before extraordinary loss per                                                                                
 common share -- assuming                                                                                     
 dilution (4)....................  $   .65   $   .23   $   .05      $  (.25)       $   (.18)       $    .42   
Pro forma net income (loss) per                                                                               
 common share -- assuming                                                                                     
 dilution (4)....................      .65       .21       .05         (.41)           (.34)            .42   
Pro forma weighted average common                                                                             
 shares outstanding -- assuming                                                                               
 dilution (4)....................   10,377    10,389    10,433       10,223          10,219          12,119   



                                   THREE-MONTH PERIOD ENDED                                                   
                                         DECEMBER 31,                                                         
                                   -------------------------                                                  
                                      1996          1997                                                      
                                   -----------   -----------                                                  
                                   (UNAUDITED)   (UNAUDITED)                                                  
                                                                                                              
STATEMENT OF OPERATIONS DATA:                                                                                 
Revenues.........................    $29,547       $35,536                                                    
Cost of goods sold...............     21,149        25,760                                                    
Plant expansion                                                                                               
 costs (1).......................         --           266                                                    
                                     -------       -------                                                    
Gross profit.....................      8,398         9,510                                                    
Selling and marketing expense,                                                                                
 including product introduction                                                                               
 costs (2).......................      4,453         2,631                                                    
General and administrative                                                                                    
 expense.........................        693         1,188                                                    
                                     -------       -------                                                    
Operating profit.................      3,252         5,691                                                    
Interest expense, net............      2,552           264                                                    
                                     -------       -------                                                    
Income (loss) before income tax                                                                               
 and extraordinary loss..........        700         5,427                                                    
Income tax.......................        268         2,062                                                    
                                     -------       -------                                                    
Income (loss) before                                                                                          
 extraordinary loss..............        432         3,365                                                    
Extraordinary loss, net of income                                                                             
 tax (3).........................         --         2,332                                                    
                                     -------       -------                                                    
Net income (loss)................    $   432       $ 1,033                                                    
                                     =======       =======                                                    
Pro forma net income (loss)                                                                                   
 before extraordinary loss per                                                                                
 common share -- assuming                                                                                     
 dilution (4)....................    $   .04       $   .19                                                    
Pro forma net income (loss) per                                                                               
 common share -- assuming                                                                                     
 dilution (4)....................        .04           .06                                                    
Pro forma weighted average common                                                                             
 shares outstanding -- assuming                                                                               
 dilution (4)....................     10,480        17,455                                                    

                                            (footnotes appear on following page)

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                                                        [Enlarge/Download Table]

                                                                  NINE-MONTH                                  
                                        FISCAL YEAR ENDED        FISCAL PERIOD   TWELVE-MONTH     FISCAL YEAR 
                                          DECEMBER 31,               ENDED       PERIOD ENDED        ENDED    
                                   ---------------------------   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                    1993      1994      1995         1996            1996            1997     
                                   -------   -------   -------   -------------   -------------   -------------
                                                                                  (UNAUDITED)                 
                                              (IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)           
                                                                                                              
OTHER DATA:                                                                                                   
EBITDA (5).......................  $ 9,495   $12,408   $13,836      $ 8,994        $ 13,936        $ 25,502   
EBITDA as a percent of                                                                                        
 revenues(5).....................     19.8%     17.9%     14.9%         9.8%           11.5%           19.7%  
Revenue per employee (end of                                                                                  
 period).........................  $   244   $   288   $   361           NM        $    445        $    432   
Working capital excluding current                                                                             
 maturities of long-term debt                                                                                 
 (average for the period) as a                                                                                
 percent of revenues.............    14.2%     12.0%      4.6%           NM             7.0%            8.5%  
Cash flows provided by (used in):                                                                             
 Operating activities............  $ 4,787   $ 3,690   $ 5,730      $(7,477)       $ (2,960)       $ 23,071   
 Investing activities............  (15,139)  (25,431)  (38,789)      (3,041)         (7,125)        (28,428)  
 Financing activities............   10,382    19,603    33,066       12,318          12,679           6,263   
Earnings to fixed                                                                                             
 charges.........................     1.87x     1.48x      .92x         .28x            .57x           1.72x  



                                   THREE-MONTH PERIOD ENDED                                                   
                                         DECEMBER 31,                                                         
                                   -------------------------                                                  
                                      1996          1997                                                      
                                   -----------   -----------                                                  
                                   (UNAUDITED)   (UNAUDITED)                                                  
                                                                                                              
OTHER DATA:                                                                                                   
EBITDA (5).......................    $ 4,957       $ 7,559                                                    
EBITDA as a percent of                                                                                        
 revenues(5).....................       16.8%         21.3%                                                   
Revenue per employee (end of                                                                                  
 period).........................         NM            NM                                                    
Working capital excluding current                                                                             
 maturities of long-term debt                                                                                 
 (average for the period) as a                                                                                
 percent of revenues.............         NM            NM                                                    
Cash flows provided by (used in):                                                                             
 Operating activities............    $ 2,464       $ 3,291                                                    
 Investing activities............       (829)      (26,302)                                                   
 Financing activities............     (1,775)       21,974                                                    
Earnings to fixed                                                                                             
 charges.........................      12.68x        44.65x                                                   

                                                        [Enlarge/Download Table]

                                                              AS OF DECEMBER 31, 1997 
                                                             -------------------------
                                                              ACTUAL    AS ADJUSTED(6)
                                                             --------   --------------
                                                                  (IN THOUSANDS)      
                                                                                      
BALANCE SHEET DATA:                                                                   
Cash and temporary investments.............................. $  1,687      $  2,212   
Working capital.............................................   14,117        16,631   
Total assets................................................  184,933       187,447   
Long-term debt, less current maturities.....................   35,638         7,735   
Stockholders' equity........................................  130,731       161,148   

---------------                                                                 
(1) Plant expansion costs include incremental direct and indirect manufacturing 
and distribution costs which are incurred as a result of construction,  
  commissioning and start-up of new capital assets. These costs are expensed
as incurred but are unrelated to current production and, therefore, are 
reported as a separate line item in the statement of operations.        

(2) Selling and marketing expense includes incremental product introduction     
    costs, including payment of product placement or "slotting" fees, related to
  the Company's launch of its Pasta LaBella flavored pasta products into the
U.S. retail grocery market. The Company did not incur such product      
    introduction costs prior to the nine-month fiscal period ended September 30,
   1996. Product introduction costs were incurred as follows: $8.1 million for
   the nine-month fiscal period ended September 30, 1996, $8.1 million for the
 twelve-month period ended September 30, 1996, $2.9 million for the fiscal
 year ended September 30, 1997 and $1.5 million for the three-month period
    ended December 31, 1996. There were no such costs for the three-month period
ended December 31, 1997.                                                

(3) Represents losses due to early extinguishment of long-term debt, net of     
income tax.                                                             

(4) Earnings per share is presented on a pro forma basis giving effect to the   
consummation of the Recapitalization in connection with the Company's   
  October 1997 initial public offering. The earnings per share amounts prior
to the three-month period ended December 31, 1997 have been restated as 
  required to comply with Statement of Financial Accounting Standards (SFAS)
   No. 128, "Earnings Per Share." For further discussion of earnings per share
 and the impact of SFAS No. 128, see the Notes to the Financial Statements
beginning on page F-7.                                                  

(5) EBITDA represents earnings before interest, income taxes, depreciation and  
amortization, thereby removing the effect of certain non-cash charges on
    income. Management believes that EBITDA is a meaningful measure of operating
 performance, cash generation and ability to service debt. However, EBITDA
should not be considered as an alternative either to: (i) net earnings  
    (determined in accordance with U.S. generally accepted accounting principles
    ("GAAP")); (ii) operating cash flow (determined in accordance with GAAP); or
    (iii) liquidity. There can be no assurance that the Company's calculation of
   EBITDA is comparable to similarly-titled items reported by other companies.

(6) Adjusted to give effect to the issuance and sale by the Company of 1,000,000
shares of Class A Common Stock in the Offering at an offering price per 
share of $30, after deducting underwriting discounts and commission and 
  estimated offering expenses and the application of the net proceeds to the
Company therefrom. See "Use of Proceeds" and "Capitalization."          

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RISK FACTORS

In addition to the other information in this Prospectus, prospective  
investors should carefully consider the following risk factors in evaluating an 
investment in the shares of Class A Common Stock offered hereby.                

COMPETITION                                                                     

   The Company operates in a highly-competitive environment against numerous
well-established national, regional and foreign companies, and many smaller     
companies in the procurement of raw materials, the development of new pasta     
products and product lines, the improvement and expansion of previously         
introduced pasta products and product lines and the production, marketing and   
distribution of pasta products. Several of these companies have longer operating
histories, broader product lines, significantly greater brand recognition and   
greater production capacity and financial and other resources than the Company. 
The Company's direct competitors include large multi-national companies such as 
food industry leader Hershey with brands such as San Giorgio(R) and Ronzoni(R), 
and Borden with brands such as Prince(R) and Creamette(R), regional U.S.        
producers of retail and institutional pasta such as Dakota Growers Pasta Company
("Dakota Growers"), a farmer-owned cooperative in North Dakota, Philadelphia    
Macaroni Co. Inc. ("Philadelphia Macaroni") and A. Zerega's Sons, Inc.          
("Zerega's"), each an independent producer, and foreign companies such as       
Italian pasta producers De Cecco ("De Cecco") and Barilla.                      

  The Company's competitive environment depends to a significant extent on
the aggregate industry capacity relative to aggregate demand for pasta products.
Several domestic pasta producers have recently completed production facility    
additions or have commenced facility expansions to increase domestic production 
capacity. In addition to AIPC's current capital expansion, management believes  
that these capacity additions represent more than 200 million pounds in         
aggregate. Dakota Growers increased the capacity of its durum wheat milling     
operations in December 1996 and has completed a pasta production capacity       
expansion increasing its total annual pasta production capacity to approximately
250 million pounds. Dakota Growers also recently acquired Primo Piatta, a       
Minnesota-based pasta producer with annual production capacity of approximately 
150 to 200 million pounds. Hershey recently added approximately 25 million      
pounds of pasta capacity to its facility in Winchester, Virginia. Barilla is    
currently building a pasta production plant near Ames, Iowa with an estimated   
annual pasta capacity of between 130 and 150 million pounds scheduled for       
completion in late 1998 or early 1999. Two major pasta producers have also      
reduced their pasta production capacity. Borden closed or sold five of its ten  
North American pasta plants in 1997, and Bestfoods eliminated its capacity of   
approximately 180 million pounds. Significant increases in industry capacity    
levels above demand for pasta products could have a material adverse effect on  
the Company's business, financial condition and results of operations.          

Several foreign producers, based principally in Italy and Turkey, have
aggressively targeted the U.S. pasta market in recent years. In 1996, a U.S.    
Department of Commerce investigation revealed that several Italian and Turkish  
producers were engaging in unfair trade practices by selling pasta at less than 
fair value in the U.S. markets and benefitting from subsidies from their        
respective governments. Effective July 1996, the U.S. International Trade       
Commission ("ITC") imposed anti-dumping and countervailing duties on Italian and
Turkish imports. While such duties may enable the Company and its domestic      
competitors to compete more favorably against Italian and Turkish producers in  
the U.S. pasta market, there can be no assurance that the duties will be        
maintained for any length of time, or that these or other foreign producers will
not sell competing products in the United States at prices less than those of   
the Company. Such practices, if continued or increased, could have a material   
adverse effect on the Company's business, financial condition and results of    
operations. Bulk imported pasta, and pasta produced in the U.S. by foreign      
firms, are generally not subject to such anti-dumping and countervailing duties.
The Department of Commerce currently is conducting an administrative review of  
its anti-dumping and countervailing duty orders of July 1996 relating to three  
Turkish and 16 Italian pasta producers, including Barilla and De Cecco. On      
January 22, 1998, the Department of Commerce indicated that it intends to issue 
preliminary findings not later than July 1, 1998, with final results of its     
review expected by October 1, 1988. The Company cannot predict the outcome of   
the Department of Commerce's review. See "Business -- Pasta Industry -- Pasta   
Production Capacity" and "-- Competition."                                      

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DEPENDENCE ON MAJOR CUSTOMERS                                                   

Historically, a limited number of customers have accounted for a      
substantial portion of the Company's revenues. During 1995, the nine-month      
fiscal period ended September 30, 1996, the fiscal year ended September 30, 1997
and the three-month period ended December 31, 1997, Sysco accounted for         
approximately 33%, 27%, 27% and 26%, respectively, and sales to Sam's Club      
accounted for approximately 23%, 19%, 22% and 21%, respectively, of the         
Company's revenues. The Company expects it will continue to rely on a limited   
number of major customers for a substantial portion of its revenues in the      
future. Management believes that a majority of the Company's fiscal 1998        
revenues will be derived from combined sales to Sysco, Sam's Club and Bestfoods.
The Company has an exclusive supply contract with Sysco (the "Sysco Agreement") 
through June 2000, subject to renewal by Sysco for two additional three-year    
periods. In April 1997, the Company entered into a long-term manufacturing and  
distribution agreement with Bestfoods (the "Bestfoods Agreement") that requires 
Bestfoods to purchase a minimum of 175 million pounds of pasta annually for nine
years. The Company does not have supply contracts with a substantial number of  
its customers, including Sam's Club. Accordingly, the Company is dependent upon 
its customers to sell the Company's products and to assist the Company in       
promoting market acceptance of, and creating demand for, the Company's products.
An adverse change in, or termination or expiration without renewal of, the      
Company's relationships with or the financial viability of one or more of its   
major customers could have a material adverse effect on the Company's business, 
financial condition and results of operations. In addition, certain exclusivity 
provisions of the Sysco Agreement and Bestfoods Agreement prevent AIPC from     
producing and supplying competitors of Sysco and Bestfoods with certain pasta   
products. Under the Sysco Agreement, the Company is restricted from supplying   
pasta products to foodservice businesses other than Sysco. Without Bestfoods's  
consent, AIPC may not produce branded retail pasta for Borden, Hershey Foods    
Corporation ("Hershey") or Barilla Alimentare S.p.A. ("Barilla"), and is limited
to the production of an aggregate of 12 million pounds of branded pasta products
annually for other producers. See "Business -- Production and Supply            
Agreements."                                                                    

MANAGEMENT OF GROWTH, EXPANSION AND INTEGRATION OF BESTFOODS BUSINESS           

     The Company has experienced rapid growth and management expects significant
additional growth in the future. Successful management of any such future growth
will require the Company to continue to invest in and enhance its operational,  
financial and management information resources and systems, attract and retain  
management personnel to manage such resources and systems, accurately forecast  
sales demand and meet such demand, accurately forecast retail sales, control its
overhead, and attract, train, motivate and manage its employees effectively.    
There can be no assurance that the Company will continue to grow, or that it    
will be effective in managing its future growth. Any failure to effectively     
manage growth could have a material adverse effect on the Company's business,   
financial condition and results of operations.                                  

     The Company is required to produce substantially all of Bestfoods Mueller's
brand pasta, which has averaged approximately 200 million pounds of pasta       
annually over the last five years. The Company has successfully completed its   
capital expansion of the South Carolina milling, production and distribution    
facilities and expects the expansion of its Missouri facilities to be fully     
completed in June 1998. Management believes this increase in capacity of        
approximately 100% will allow AIPC to meet its significant volume and other     
obligations under the Bestfoods Agreement and provide for future growth. There  
can be no assurance, however, that such expanded facilities will be adequate to 
meet the Bestfoods volume requirements and any future growth or that future     
revenues from products produced at the expanded facilities will be sufficient to
recover the Company's investment in the expansion.                              

FAILURE TO IMPLEMENT HARVEST STATES ALLIANCE                                    

In November 1997, the Company announced a letter of intent with Amber 
Milling Company, a division of Harvest States, for the possible construction and
operation by AIPC of a new pasta production facility targeting the industrial   
pasta market. The new facility would be located adjacent to the Harvest States  
mill in Kenosha, Wisconsin. Reaching a final agreement is subject to several    
pre-conditions, and the specific terms of the alliance have not been finalized. 
There can be no assurance that the Company will be able to reach a definitive   
agreement with Harvest States, that any construction pursuant to such an        
agreement will be                                                               

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completed on schedule and within budget or that future revenues from products   
produced at the new facility will be sufficient to recover the Company's        
contemplated investment in the new facility. Any significant delay or cost      
overrun in finalizing the terms of the Harvest States alliance or the           
construction of the new facility could have a material adverse effect on the    
Company's future financial condition and results of operations.                 

RAW MATERIALS                                                                   

    The principal raw material in the Company's products is durum wheat. Durum
wheat is used almost exclusively in pasta production and is a narrowly traded,  
commodity crop. The Company attempts to minimize the effects of durum wheat cost
fluctuations through forward purchase contracts and raw material cost-based     
pricing agreements with many of its customers. The Company's commodity          
procurement and pricing practices are intended to reduce the risk of durum wheat
cost increases on profitability, but also may temporarily affect the Company's  
ability to benefit from possible durum wheat cost decreases. The supply and     
price of durum wheat is subject to market conditions and is influenced by       
numerous factors beyond the control of the Company, including general economic  
conditions, natural disasters and weather conditions, competition, and          
governmental programs and regulations. The supply and cost of durum wheat may   
also be adversely affected by insects, plant diseases and funguses. The Company 
also relies on the supply of plastic, corrugated and other packaging materials. 
The costs of durum wheat and packaging materials have varied widely in recent   
years and future changes in such costs may cause the Company's results of       
operations and margins to fluctuate significantly. A large, rapid increase in   
the cost of raw materials could have a material adverse effect on the Company's 
operating profit and margins unless and until the increased cost can be passed  
along to customers. Historically, changes in prices of the Company's pasta      
products have lagged changes in the Company's materials costs. Competitive      
pressures may also limit the ability of the Company to raise prices in response 
to increased raw material costs in the future. Accordingly, there can be no     
assurance as to whether, or the extent to which, the Company will be able to    
offset raw material cost increases with increased product prices. See           
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations" and "Business -- Raw Materials and Supplies."                       

RELIANCE ON PASTA; PRODUCT LINE CONCENTRATION                                   

     Since commencing operations in 1988, the Company has focused exclusively on
the dry pasta industry. For the foreseeable future, AIPC expects to continue to 
receive substantially all of its revenues from the sale of pasta and            
pasta-related products. Because of this product concentration, any decline in   
the demand or pricing for dry pasta, any shift in consumer preferences away from
dry pasta, or any other factor that adversely affects the pasta market, could   
have a more significant adverse effect on the Company's business, financial     
condition and results of operations than on pasta producers which also produce  
other products. In addition, the Company's pasta production equipment is highly 
specialized and is not adaptable to the production of non-pasta food products.  

RELIANCE ON KEY PERSONNEL                                                       

The Company's operations and prospects depend in large part on the    
performance of its senior management team, including Horst W. Schroeder,        
Chairman of the Board, Timothy S. Webster, President and Chief Executive        
Officer, David E. Watson, Executive Vice President and Chief Financial Officer, 
Norman F. Abreo, Executive Vice President of Operations, Darrel E. Bailey,      
Senior Vice President of Institutional Sales and Marketing, David B. Potter,    
Senior Vice President of Procurement and Jerry H. Dear, Senior Vice President of
Retail Markets. No assurance can be given that the Company would be able to find
qualified replacements for any of these individuals if their services were no   
longer available. The loss of the services of one or more members of the        
Company's senior management team could have a material adverse effect on the    
Company's business, financial condition and results of operations. The Company  
does not maintain key person life insurance on any of its key employees. The    
Company has employment agreements with Messrs. Schroeder, Webster, Watson, Abreo
and Potter. See "Management."                                                   

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TRANSPORTATION                                                                  

 Durum wheat is shipped to the Company's production facility in Missouri
directly from North Dakota, Montana and Canada under a long-term rail contract  
with the Canadian Pacific Rail System. Durum wheat is also shipped to the       
Company's mill and production facility in South Carolina from the northern      
Midwest and southwest regions of the United States under a 10-year agreement    
with the Norfolk Southern Railway Company. Under both agreements, the Company is
obligated to transport specified percentages of the Company's actual wheat      
requirements and, in the event such requirements are not met, the Company must  
reimburse the carrier for certain of its costs. The Company currently is in     
compliance with such volume obligations. An extended interruption in the        
Company's ability to ship durum wheat by railroad to its facilities could have a
material adverse affect on the Company's business, financial condition and      
results of operations. The Company experienced a significant interruption in    
railroad shipments in 1994 due to a railroad strike. While the Company would    
attempt to transport such materials by alternative means if it were to          
experience another interruption due to strike, natural disasters or otherwise,  
there can be no assurance that the Company would be able to do so or be         
successful in doing so in a timely and cost-effective manner. See "Business --  
Milling and Production Processes" and "-- Raw Materials and Supplies."          

PRODUCTION AND INVENTORY MANAGEMENT                                             

   Most of the Company's customers use, to some extent, inventory management
systems which track sales of particular products and rely on reorders being     
rapidly filled by suppliers to meet consumer demand rather than on large        
inventories being maintained by retailers. Although these systems reduce a      
retailer's investment in inventory, they increase pressure on suppliers like the
Company to fill orders promptly and thereby shift a portion of the retailer's   
inventory management cost to the supplier. The Company's production of excess   
inventory to meet anticipated retailer demand could result in markdowns and     
increased inventory carrying costs for the Company. In addition, if the Company 
underestimates the demand for its products, it may be unable to provide adequate
supplies of pasta products to retailers in a timely fashion, and may            
consequently lose sales.                                                        

POTENTIAL VOLATILITY OF FUTURE QUARTERLY OPERATING RESULTS AND STOCK PRICE      

     The Company's results of operations may fluctuate on a quarterly basis as a
result of a number of factors, including total sales volumes, the timing and    
scope of new customer volumes, the timing and amounts of price adjustments due  
to durum wheat and other cost changes, the cost of raw materials, including     
durum wheat (see "Risk Factors -- Raw Materials"), plant expansion costs and    
interest expenses. In addition, the market price of the Class A Common Stock    
could fluctuate widely in response to various factors related to the Company,   
its competitors and the financial markets in general, and unrelated to the      
longer term operating performance of the Company. Such factors include, but are 
not limited to, quarterly operating results, changes in financial analysts'     
recommendations or earnings estimates and changes in general or regional        
economic conditions. Further, the stock market has experienced price and volume 
fluctuations in recent periods, and its volatility, even if unrelated to the    
operating performance of the Company, may adversely affect the market price of  
the Class A Common Stock.                                                       

RISK OF PRODUCT LIABILITY                                                       

Although the Company has never been involved in a product liability   
lawsuit, the sale of food products for human consumption involves the risk of   
injury to consumers as a result of tampering by unauthorized third parties,     
product contamination or spoilage, including the presence of foreign objects,   
substances, chemicals, aflatoxin and other agents, or residues introduced during
the growing, storage, handling or transportation phases. While the Company is   
subject to U.S. Food & Drug Administration inspection and regulations and       
believes its facilities comply in all material respects with all applicable laws
and regulations, there can be no assurance that consumption of the Company's    
products will not cause a health-related illness in the future or that the      
Company will not be subject to claims or lawsuits relating to such matters. The 
Company maintains product liability insurance in an amount which the Company    
believes to be adequate. However, there can be no assurance that the Company    
will not incur claims or liabilities for which it is not insured or that exceed 
the amount of its insurance coverage.                                           

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SENSITIVITY TO INTEREST RATE FLUCTUATIONS; COVENANT RESTRICTIONS                

 As of March 31, 1998, the Company's indebtedness had a weighted average
interest rate of 7.38% and approximately 80%, or $49.0 million, of the Company's
indebtedness bore interest at variable rates. If the Company were to incur      
additional amounts of variable-rate indebtedness in the future, and if interest 
rates were to significantly increase thereafter, the Company's operating results
and its ability to satisfy its debt service obligations may be materially and   
adversely affected. In connection with the amendment of the Company's Credit    
Facility in October 1997, the Company entered into a $20 million fixed rate     
swap.                                                                           

The limitations contained in the agreements relating to the Company's 
Credit Facility restrict the Company from paying dividends and could limit the  
ability of the Company to effect future debt or equity financings and may       
otherwise restrict corporate activities, including the ability to avoid defaults
and to respond to competitive market conditions, to provide for capital         
expenditures beyond those permitted or to take advantage of business            
opportunities. See "Capitalization" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital          
Resources."                                                                     

YEAR 2000 COMPLIANCE                                                            

    Many of the Company's computer software and hardware systems currently are
not, or will or may not be, able to read, calculate or output correctly using   
dates after 1999, and such systems will require significant modifications in    
order to be "Year 2000 compliant." This issue may adversely affect the          
operations and financial performance of the Company because its computer systems
are an integral part of the Company's manufacturing and distribution activities 
as well as its accounting and other information systems and because the Company 
will have to divert financial resources and personnel to address this issue. The
Company has reviewed its computer hardware and software systems and has begun   
upgrading those systems through modification or replacement. The Company        
currently anticipates this upgrading to be completed during 1998.               

   Although the Company is not aware of any material operational impediments
associated with upgrading its computer hardware and software systems to be Year 
2000 compliant, there can be no assurance that the upgrade of the Company's     
computer systems will be completed on schedule, within budget, or will be free  
of defects. If any such risks materialize, the Company could experience material
adverse consequences, material costs or both. Year 2000 compliance may also     
adversely affect the operations and financial performance of the Company        
indirectly by causing complications of, or otherwise affecting, the operations  
of any one or more of the Company's suppliers and customers. The Company intends
to contact its significant suppliers and customers in the first half of calendar
year 1998 in an attempt to identify any potential Year 2000 compliance issues   
with them. The Company is currently unable to anticipate the magnitude of the   
operational or financial impact on the Company of Year 2000 compliance issues   
with its suppliers and customers.                                               

ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER, BY-LAW AND STATUTORY PROVISIONS        

Charter and Bylaws.  Certain provisions of the Company's Charter and  
By-laws (the "By-laws") could delay or frustrate the removal of incumbent       
directors and could make more difficult a merger, tender offer or proxy contest 
involving the Company, even if such events could be beneficial, in the short    
term, to the interests of the stockholders. For example, the Charter and By-laws
allow the Company to issue preferred stock with rights senior to those of the   
Class A Common Stock without stockholder action, require the Board of Directors 
to be divided into three classes serving three-year staggered terms, require    
stockholder actions to be effected only at annual or special stockholder        
meetings (unless the action to be effected by written consent of stockholders   
and the taking of such action by written consent have been approved in advance  
by the Board of Directors or unless the shareholder action involves the removal 
of a director nominated pursuant to the Stockholders Agreement and the person   
who nominated such director pursuant to the Stockholders Agreement votes in     
favor of the removal of such director pursuant to such written consent), require
the affirmative vote of holders of two-thirds of the outstanding shares entitled
to vote to remove directors (unless the removal of a director has been requested
by a shareholder who designated such director as a nominee for election pursuant
to the Stockholders Agreement, in which case such director can be removed with  
or without cause by the affirmative vote of holders of a simple majority of such
shares), require the affirmative vote of holders of at least 80% of the         
outstanding shares to amend certain provisions of the Charter or to repeal or   
amend the Company's By-laws and impose various other procedural requirements on 
the taking of certain actions.                                                  

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     Pursuant to the Charter, shares of preferred stock and Class A Common Stock
may be issued in the future without further stockholder approval and, in the    
case of such preferred stock, upon such terms and conditions, and having such   
rights, privileges and preferences, as the Board of Directors may determine. The
issuance of preferred stock and Class A Common Stock, while providing desirable 
flexibility in connection with possible acquisitions and other corporate        
transactions, could have the effect of making it more difficult for a third     
party to acquire, or effectively preventing a third party from acquiring, a     
majority of the outstanding Common Stock of the Company. See "Description of    
Capital Stock -- Delaware Law and Certain Charter and By-Law Provisions."       

     Delaware Corporation Law.  The Company also is subject to provisions of the
General Corporation Law of the State of Delaware, as amended (the "DGCL"), that 
prohibit a publicly-held Delaware corporation from engaging in a broad range of 
business combinations with a person who, together with affiliates and           
associates, owns 15% of more of the corporation's common stock (an "Interested  
Stockholder") for three years after the person became an Interested Stockholder,
unless the business combination is approved in a prescribed manner. Those       
provisions could discourage or make more difficult a merger, tender offer or    
similar transaction, even if favorable to the Company's stockholders. See       
"Description of Capital Stock -- Delaware Law and Certain Charter and By-Law    
Provisions."                                                                    

     Stockholders Agreement.  In addition, the Stockholders Agreement grants the
Morgan Stanley Stockholders the right to designate one nominee to the Board of  
Directors.                                                                      

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS                            

 Upon consummation of the Offering, the Company will have outstanding an
aggregate of 17,978,680 shares of Common Stock, assuming no exercise of         
outstanding options. Of these shares, all of the 5,400,000 shares sold in the   
Offering will be freely tradeable without restriction or further registration   
under the Securities Act, unless such shares are purchased by "affiliates" of   
the Company as that term is defined in Rule 144 under the Securities Act        
("Affiliates"). Of the remaining 12,578,680 shares, 3,493,680 shares of Common  
Stock held by certain existing stockholders are "restricted securities" as that 
term is defined in Rule 144 under the Securities Act ("Restricted Shares").     
Restricted Shares may be sold in the public market only if registered or if they
qualify for an exemption from registration under Rule 144 or 701 promulgated    
under the Securities Act. Beginning 90 days after the date of this Prospectus,  
3,492,048 shares will be eligible for sale pursuant to Rule 144, provided the   
conditions of Rule 144 are met, upon expiration of the lock-up agreements at    
least 90 days after the date of this Prospectus. All officers, directors and    
certain stockholders and holders of vested options of the Company have agreed   
not to sell or otherwise transfer any shares of Common Stock or any other       
securities of the Company for a period of at least 90 days after the date of    
this Prospectus. Sales, or the possibility of sales, of Common Stock by certain 
of the Company's existing stockholders, whether in connection with the exercise 
of registration rights or otherwise, could adversely affect the market price of 
the Company's Class A Common Stock. The Company has granted the stockholders who
are parties to the Stockholders Agreement, including the Morgan Stanley         
Stockholders, certain "demand" and "piggyback" registration rights with respect 
to the Common Stock owned by such stockholders. See "Certain Relationships and  
Related Transactions -- Stockholders Agreement" and "Shares Eligible for Future 
Sale."                                                                          

ABSENCE OF DIVIDENDS                                                            

   The Company has never declared or paid cash dividends on its Common Stock
and currently intends to retain all available funds for use in the operation and
expansion of its business. The Company does not anticipate that any cash        
dividends on the Common Stock will be declared or paid in the foreseeable       
future. See "Dividend Policy."                                                  

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USE OF PROCEEDS 

    The net proceeds to the Company from the sale of 1,000,000 shares of Class
A Common Stock offered by the Company are estimated to be approximately $27.9   
million (after deducting underwriting discounts and commissions and estimated   
offering expenses), based on an offering price per share of $30. The Company    
intends to use approximately $27.9 million of the net proceeds from the Offering
to repay a portion of its outstanding indebtedness under its Credit Facility and
for general corporate purposes. The Company will not receive any of the proceeds
from the sale of Class A Common Stock by the Selling Stockholders. See          
"Underwriters."                                                                 

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY 

 The Class A Common Stock of the Company is listed on the New York Stock
Exchange under the symbol PLB. The Class A Common Stock commenced trading on the
New York Stock Exchange on October 9, 1997. The following table sets forth, for 
the periods indicated, the range of high and low reported sales prices per share
of the Class A Common Stock, as reported on the New York Stock Exchange         
Composite Transactions Tape:                                                    

                                                                [Download Table]

                                                                HIGH    LOW    
                                                                ----    ---    
                                                                               
1998                                                                           
  First Quarter.............................................    $26     $19 1/4
  Second Quarter............................................     37 1/4  23 1/4
  Third Quarter (through April 30, 1998)....................     36 5/8  30    

On April 30, 1998, the reported last sale price for the Class A Common
Stock as reported on the New York Stock Exchange Composite Transactions Tape was
$31 per share. As of April 30, 1998, the Company had 16,777,418 shares of Class 
A Common Stock outstanding held by approximately 5,600 stockholders of record as
of the Company's record date of December 29, 1997.                              

   The Company has not declared or paid any dividends on its Common Stock to
date and does not anticipate paying any such dividends in the foreseeable       
future. The Company intends to retain earnings for the foreseeable future to    
provide funds for the operation and expansion of its business and for the       
repayment of indebtedness. The borrowing agreements relating to the Company's   
Credit Facility contain certain provisions which effectively prohibit the       
payment of dividends. Any determination to pay dividends in the future will be  
at the discretion of the Company's Board of Directors and will depend upon the  
Company's financial condition, capital requirements, results of operations and  
other factors, including any contractual or statutory restrictions on the       
Company's ability to pay dividends.                                             

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CAPITALIZATION

    The following table sets forth information regarding the capitalization of
the Company as of December 31, 1997, and as adjusted to give effect to the      
issuance and sale of 1,000,000 shares of Class A Common Stock offered by the    
Company hereby and the application of the net proceeds therefrom, which are     
estimated to be approximately $27.9 million (after deducting underwriting       
discounts and commissions and estimated offering expenses), at an offering price
per share of $30. The following table should be read in conjunction with the    
Financial Statements, including the Notes thereto, appearing elsewhere in this  
Prospectus. See "Use of Proceeds," "Management's Discussion and Analysis of     
Financial Condition and Results of Operations" and "Description of Capital Stock
-- General."                                                                    

                                                        [Enlarge/Download Table]

                                                               AS OF DECEMBER 31, 1997  
                                                              --------------------------
                                                               ACTUAL     AS ADJUSTED(1)
                                                              --------    --------------
                                                                    (IN THOUSANDS)      
                                                                                        
Long-term debt and capital lease obligations, current                                   
  portion...................................................  $    913       $    913   
                                                              ========       ========   
Long-term debt and capital lease obligations, less current                              
  portion:                                                                              
  Long-term debt(2).........................................  $ 29,000       $  1,097   
  Capital lease obligations.................................     6,638          6,638   
                                                              --------       --------   
     Total long-term debt and capital lease obligations,                                
      less current portion..................................    35,638          7,735   
                                                              --------       --------   
Stockholders' equity:                                                                   
  Preferred stock, $.001 par value, 10,000,000 shares                                   
     authorized, no shares issued and outstanding and as                                
     adjusted...............................................        --             --   
  Class A Common Stock, $.001 par value, 75,000,000 shares                              
     authorized and 16,776,056 shares issued and outstanding                            
     and 17,789,680 shares issued and outstanding, as                                   
     adjusted(3)............................................        16             17   
  Class B Common Stock, $.001 par value, 25,000,000 shares                              
     authorized, no shares issued and outstanding and no                                
     shares issued and outstanding, as adjusted.............        --             --   
  Additional paid-in capital................................   142,008        172,424   
  Notes receivable from officers............................      (273)          (273)  
  Accumulated deficit.......................................   (11,020)       (11,020)  
                                                              --------       --------   
     Total stockholders' equity.............................   130,731        161,148   
                                                              --------       --------   
       Total capitalization.................................  $166,369       $168,883   
                                                              ========       ========   

---------------                                                                 

(1) Adjusted to give effect to the issuance and sale by the Company of 1,000,000
shares of Class A Common Stock in the Offering at an offering price per 
share of $30, after deducting underwriting discounts and commissions and
  estimated offering expenses and the application of the net proceeds to the
   Company therefrom. Also included is the exercise of options to obtain Class
    A Common Stock which was subsequently sold by Messrs. Schroeder, Webster and
Abreo as a part of this Offering. See "Use of Proceeds."                

(2) The Company intends to apply the net proceeds to repay a portion of its     
 outstanding indebtedness under its Credit Facility. As of March 31, 1998,
the Company had $49 million outstanding under the Credit Facility.      

(3) Does not include 1,976,402 shares of Class A Common Stock issuable upon     
exercise of stock options granted under the Company's three stock option
plans, of which options to purchase 1,445,394 shares are currently      
  outstanding but not exercisable and options to purchase 531,008 shares are
currently outstanding and exercisable. See "Management -- Stock Option  
Plans."                                                                 

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SELECTED FINANCIAL AND OTHER DATA 

The selected statement of operations data presented below for the fiscal
years ended December 31, 1995, the nine-month fiscal period ended September 30, 
1996 and the fiscal year ended September 30, 1997 are derived from, and are     
qualified by reference to, the Financial Statements of the Company, and Notes   
thereto, audited by Ernst & Young LLP, independent auditors, whose report on the
fiscal year ended December 31, 1995, the nine-month fiscal period ended         
September 30, 1996 and the fiscal year ended September 30, 1997, appears        
elsewhere in this Prospectus. The selected statement of operations data for the 
fiscal years ended December 31, 1993 and 1994 and the selected balance sheet    
data as of December 31, 1993, 1994 and 1995 have been derived from audited      
financial statements of the Company not included herein. The selected statement 
of operations data for the twelve-month period ended September 30, 1996, and the
three-month periods ended December 31, 1996 and 1997, and the balance sheet data
as of December 31, 1996 and 1997 have been derived from the Company's unaudited 
financial statements which, in the opinion of management, have been prepared on 
the same basis as the audited financial statements and reflect all adjustments  
(consisting of normal recurring adjustments) necessary for a fair presentation  
of the Company's results of operations and financial position of the Company for
such periods and as of such dates. The statement of operations data of the      
Company for the twelve-month period ended September 30, 1996 are included herein
only for comparison purposes. In 1996, the Company changed its fiscal year end  
from December 31 to the last Friday of September or the first Friday of October.
This change resulted in a nine-month fiscal period ended September 30, 1996, a  
53-week year for fiscal 1997, and a 52- or 53-week year for all subsequent      
fiscal years. The Company's first three fiscal quarters end on the Friday last  
preceding December 31, March 31, and June 30 of each year. For purposes of this 
Prospectus, the 1996 fiscal year is described as the nine-month fiscal period   
ended September 30, 1996. The selected financial and other data set forth below 
should be read in conjunction with "Management's Discussion and Analysis of     
Financial Condition and Results of Operations" and the Company's Financial      
Statements, including the Notes thereto, appearing elsewhere in this Prospectus.

                                                        [Enlarge/Download Table]

                                                          NINE-MONTH                                        THREE-MONTH PERIOD    
                              FISCAL YEAR ENDED          FISCAL PERIOD   TWELVE-MONTH     FISCAL YEAR              ENDED          
                                 DECEMBER 31,                ENDED       PERIOD ENDED        ENDED             DECEMBER 31,       
                        ------------------------------   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   -------------------------
                          1993       1994       1995         1996            1996            1997           1996          1997    
                        --------   --------   --------   -------------   -------------   -------------   -----------   -----------
                                                                         (UNAUDITED)                     (UNAUDITED)   (UNAUDITED)
                                                  (IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)                           
                                                                                                                                  
STATEMENT OF OPERATIONS                                                                                                           
DATA:                                                                                                                             
Revenues..............  $ 47,872   $ 69,465   $ 92,903      $92,074        $121,149        $129,143       $ 29,547      $ 35,536  
Cost of goods sold....    35,081     54,393     73,851       68,555          91,230          93,467         21,149        25,760  
Plant expansion costs                                                                                                             
  (1).................     1,171        484      2,065           --              --              --             --           266  
                        --------   --------   --------      -------        --------        --------       --------      --------  
Gross profit..........    11,620     14,588     16,987       23,519          29,919          35,676          8,398         9,510  
Selling and marketing                                                                                                             
  expense, including                                                                                                              
  product introduction                                                                                                            
  costs (2)...........     2,883      3,792      5,303       16,798          18,445          13,664          4,453         2,631  
General and                                                                                                                       
  administrative                                                                                                                  
  expense.............     2,049      1,951      2,930        2,805           3,686           3,766            693         1,188  
                        --------   --------   --------      -------        --------        --------       --------      --------  
Operating profit......     6,688      8,845      8,754        3,919           7,788          18,246          3,252         5,691  
Interest expense,                                                                                                                 
  net.................     3,210      4,975      8,008        8,023          10,770          10,119          2,552           264  
                        --------   --------   --------      -------        --------        --------       --------      --------  
Income (loss) before                                                                                                              
  income tax and                                                                                                                  
  extraordinary                                                                                                                   
  loss................     3,478      3,870        746       (4,107)         (2,982)          8,127            700         5,427  
Income tax............    (3,221)     1,484        270       (1,556)         (1,139)          3,070            268         2,062  
                        --------   --------   --------      -------        --------        --------       --------      --------  
Income (loss) before                                                                                                              
  extraordinary                                                                                                                   
  loss................     6,699      2,386        476       (2,551)         (1,843)          5,057            432         3,365  
Extraordinary loss,                                                                                                               
  net of income tax                                                                                                               
  (3).................        --        204         --        1,647           1,647              --             --         2,332  
                        --------   --------   --------      -------        --------        --------       --------      --------  
Net income (loss).....  $  6,699   $  2,182   $    476      $(4,198)       $ (3,490)       $  5,057       $    432      $  1,033  
                        ========   ========   ========      =======        ========        ========       ========      ========  
Pro forma net income                                                                                                              
  (loss) before                                                                                                                   
  extraordinary loss                                                                                                              
  per common share --                                                                                                             
  assuming dilution                                                                                                               
  (4).................  $    .65   $    .23   $    .05      $  (.25)       $   (.18)       $    .42       $    .04      $    .19  
Pro forma net income                                                                                                              
  (loss) per common                                                                                                               
  share -- assuming                                                                                                               
  dilution (4)........       .65        .21        .05         (.41)           (.34)            .42            .04           .06  
Pro forma weighted                                                                                                                
  average common                                                                                                                  
  shares outstanding                                                                                                              
  -- assuming dilution                                                                                                            
  (4).................    10,377     10,389     10,433       10,223          10,219          12,119         10,480        17,455  
(footnotes appear on following page)                                                                                              

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                                                        [Enlarge/Download Table]

                                                          NINE-MONTH                                        THREE-MONTH PERIOD    
                              FISCAL YEAR ENDED          FISCAL PERIOD   TWELVE-MONTH     FISCAL YEAR              ENDED          
                                 DECEMBER 31,                ENDED       PERIOD ENDED        ENDED             DECEMBER 31,       
                        ------------------------------   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   -------------------------
                          1993       1994       1995         1996            1996            1997           1996          1997    
                        --------   --------   --------   -------------   -------------   -------------   -----------   -----------
                                                                         (UNAUDITED)                     (UNAUDITED)   (UNAUDITED)
                                                  (IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)                           
                                                                                                                                  
OTHER DATA:                                                                                                                       
EBITDA (5)............  $  9,495   $ 12,408   $ 13,836      $ 8,994        $ 13,936        $ 25,502       $  4,957      $  7,559  
EBITDA as a percent of                                                                                                            
  revenues (5)........     19.8%      17.9%      14.9%         9.8%           11.5%           19.7%          16.8%         21.3%  
Revenue per employee                                                                                                              
  (end of period).....  $    244   $    288   $    361           NM        $    445        $    432             NM            NM  
Working capital                                                                                                                   
  excluding current                                                                                                               
  maturities of                                                                                                                   
  long-term debt                                                                                                                  
  (average for the                                                                                                                
  period) as a percent                                                                                                            
  of revenues.........     14.2%      12.0%       4.6%           NM            7.0%            8.5%             NM            NM  
Cash flows provided by                                                                                                            
  (used in):                                                                                                                      
  Operating                                                                                                                       
    activities........  $  4,787   $  3,690   $  5,730      $(7,477)       $ (2,960)       $ 23,071       $  2,464      $  3,291  
  Investing                                                                                                                       
    activities........   (15,139)   (25,431)   (38,789)      (3,041)         (7,125)        (28,428)          (829)      (26,302) 
  Financing                                                                                                                       
    activities........    10,382     19,603     33,066       12,318          12,679           6,263         (1,775)       21,974  
Earnings to fixed                                                                                                                 
  charges.............     1.87x      1.48x       .92x         .28x            .57x           1.72x         12.68x        44.65x  
BALANCE SHEET DATA (AT                                                                                                            
  END OF PERIOD):                                                                                                                 
Cash and temporary                                                                                                                
  investments.........  $  2,149   $     11   $     18      $ 1,818        $  1,818        $  2,724       $  1,678      $  1,687  
Working capital.......     3,077      4,830      6,632       (1,601)         (1,601)         12,188         (1,965)       14,117  
Total assets..........    66,337     93,629    135,424      141,688         141,688         158,175        137,974       184,933  
Long-term debt, less                                                                                                              
  current                                                                                                                         
  maturities..........    40,024     62,375     97,452       93,284          93,284         100,137         92,143        35,638  
Stockholders'                                                                                                                     
  equity..............    16,973     19,401     20,067       15,969          15,969          42,984         16,402       130,731  

---------------                                                                 
(1) Plant expansion costs include incremental direct and indirect manufacturing 
and distribution costs which are incurred as a result of construction,  
  commissioning and start-up of new capital assets. These costs are expensed
as incurred but are unrelated to current production and, therefore, are 
reported as a separate line item in the statement of operations.        

(2) Selling and marketing expense includes incremental product introduction     
    costs, including payment of product placement or "slotting" fees, related to
  the Company's launch of its Pasta LaBella flavored pasta products into the
U.S. retail grocery market. The Company did not incur such product      
    introduction costs prior to the nine-month fiscal period ended September 30,
   1996. Product introduction costs were incurred as follows: $8.1 million for
   the nine-month fiscal period ended September 30, 1996, $8.1 million for the
 twelve-month period ended September 30, 1996, $2.9 million for the fiscal
 year ended September 30, 1997 and $1.5 million for the three-month period
    ended December 31, 1996. There were no such costs for the three-month period
ended December 31, 1997.                                                

(3) Represents losses due to early extinguishment of long-term debt, net of     
income tax.                                                             

(4) Earnings per share is presented on a pro forma basis giving effect to the   
consummation of the Recapitalization in connection with the Company's   
  October 1997 initial public offering. The earnings per share amounts prior
to the three-month period ended December 31, 1997 have been restated as 
  required to comply with Statement of Financial Accounting Standards (SFAS)
   No. 128, "Earnings Per Share." For further discussion of earnings per share
and the impact SFAS No. 128, see the Notes to the Financial Statements  
beginning on page F-7.                                                  

(5) EBITDA represents earnings before interest, income taxes, depreciation and  
amortization, thereby removing the effect of certain non-cash charges on
    income. Management believes that EBITDA is a meaningful measure of operating
 performance, cash generation and ability to service debt. However, EBITDA
should not be considered as an alternative either to: (i) net earnings  
    (determined in accordance with U.S. generally accepted accounting principles
    ("GAAP")); (ii) operating cash flow (determined in accordance with GAAP); or
    (iii) liquidity. There can be no assurance that the Company's calculation of
   EBITDA is comparable to similarly-titled items reported by other companies.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
CONDITION AND RESULTS OF OPERATIONS 

   The following should be read in conjunction with the Financial Statements
of the Company and the Notes thereto included elsewhere in this Prospectus. For 
a discussion of important factors that could cause actual results to differ     
materially from the forward-looking statements, see "Risk Factors."             

  In 1996, the Company changed its fiscal year end from December 31 to the
last Friday of September or the first Friday of October. This change resulted in
a nine-month fiscal year for 1996, a 53-week year for fiscal 1997, and a 52- or 
53-week year for all subsequent fiscal years. The Company's first three fiscal  
quarters end on the Friday last preceding December 31, March 31, and June 30.   
For purposes of this Prospectus, the 1996 fiscal year is described as the       
nine-month fiscal period ended September 30, 1996. The statement of operations  
data of the Company for the nine-month period ended September 30, 1995, the     
twelve-month period ended September 30, 1996, the calendar year ended December  
31, 1996 and the three-month period ended December 31, 1996 are included herein 
only for comparison purposes.                                                   

OVERVIEW                                                                        

 AIPC is the second largest and one of the fastest-growing producers and
marketers of pasta in North America. The Company commenced operations in 1988   
with the North American introduction of new, highly-efficient durum wheat       
milling and pasta production technology. Management believes that the Company's 
singular focus on pasta, vertically-integrated facilities, continued            
technological improvements and development of a highly-skilled workforce enable 
AIPC to produce high-quality pasta at costs below those of many of its          
competitors. Management believes that the combination of the Company's cost     
structure, the average age of its competitors' North American pasta production  
equipment and the growing pasta consumption in North America creates significant
opportunities for continued growth.                                             

The Company generates its revenues in two customer markets: Retail and
Institutional. The Retail market revenues include the revenues from sales of the
Company's pasta products to customers who resell the Company's pasta in retail  
channels. These revenues include sales to club stores and grocery retailers,    
encompass sales of the Company's private label and branded products, and include
sales to Bestfoods. The Institutional market revenues include the revenues from 
product sales to customers who use the Company's pasta as an ingredient in food 
products or customers who resell the Company's pasta in the foodservice market  
such as Sysco. The Institutional market also includes revenues from             
opportunistic sales to government agencies and other customers which the Company
pursues periodically when capacity is available ("Contract Sales") to increase  
production volumes and thereby lower average unit costs. Average sales prices in
the Retail and Institutional markets differ depending on customer-specific      
packaging and raw material requirements, product manufacturing complexity and   
other service requirements. Generally, average retail sales prices are higher   
than institutional sales prices. Average retail and institutional prices vary   
due to changes in the relative share of customer revenues and item specific     
sales volumes (i.e., product sales mix). Revenues are reported net of cash      
discounts, pricing allowances and product returns.                              

 The Company seeks to develop strategic customer relationships with food
industry leaders that have substantial pasta requirements. The Company has      
long-term supply agreements with Sysco and Bestfoods and other arrangements with
food industry leaders, such as Sam's Club, that provide for the "pass-through"  
of direct material cost changes as pricing adjustments. The pass-throughs are   
generally limited to actual changes in cost and, as a result, impact marginal   
profitability in periods of changing costs and prices. The pass-throughs are    
generally effective 30 to 90 days following such costs changes and thereby      
significantly reduce the long-term exposure of the Company's operating results  
to the volatility of raw material costs. Management estimates that over 70% of  
the Company's revenues in fiscal 1998 will be pursuant to long-term supply      
agreements and other non-contractual customer arrangements which provide for the
pass-through of changes in durum wheat costs. Management believes that this     
percentage will increase as the Company generates revenue from Bestfoods. See   
"Risk Factors -- Raw Materials."                                                

The Company's Pasta LaBella flavored pasta products are sold at prices
which are significantly higher than the Company's non-flavored products as a    
result of higher product and distribution costs and its premium brand position. 
In the second quarter of calendar 1996, the Company began distribution of Pasta 
LaBella flavored pasta into the U.S. Retail grocery market. This initiative was 
supported by a comprehensive trade and consumer                                 
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product introduction program, including the payment of product placement or     
"slotting" fees to retailers, and an on-going selling and marketing program     
required to support branded retail sales. The Company achieved distribution in  
approximately 40% of the U.S. Retail grocery market and ceased to incur         
additional product introduction costs in the first quarter of fiscal 1997. The  
Company did not incur such product introduction costs prior to the calendar year
ended December 31, 1996. Product introduction costs included in selling and     
marketing expense were incurred as follows: $9.6 million for the calendar year  
ended December 31, 1996, $8.1 million for the nine-month fiscal period ended    
September 30, 1996, $8.1 million for the twelve-month period ended September 30,
1996, $2.9 million for the fiscal year ended September 30, 1997 and $1.5 million
for the three-month period ended December 31, 1996. The Company did not incur   
product introduction costs during the three-month period ended December 31,     
1997.                                                                           

The Company's cost of goods sold consists primarily of raw materials, 
packaging, manufacturing (including depreciation) and distribution costs. A     
significant portion of the Company's cost of goods sold is durum wheat. The     
Company purchases durum wheat on the open market and, consequently, is subject  
to fluctuations in cost. The Company manages its durum cost risk through durum  
cost "pass-through" agreements in long-term contracts and other noncontractual  
arrangements with its customers and advance purchase contracts for durum wheat  
which are generally less than six months' duration. The following chart         
illustrates the fluctuation in the price of durum wheat during the years        
1977-1997:                                                                      

                                                                [Download Table]
                                                                              
3.37                                                                         i
3.66                                                                         i
4.73                                                                         i
6.81                                                                         i
4.61                                                                         i
4.25                                                                         i
4.83                                                                         i
4.45                                                                         i
4.07                                                                         i
3.57                                                                         i
4.13                                                                         i
5.53                                                                         i
4.25                                                                         i
3.48                                                                        ii
3.61                                                                         i
3.88                                                                         i
5.84                                                                         i
6.28                                                                         i
7.21                                                                         i
5.65                                                                         i
6.3                                                                          i
i                                                                             

The durum cost volatility and the timing and amount of sales price    
adjustments impacted profit and margins over the 1994-1997 periods and led to   
increases in the Company's costs beginning in the first quarter of its 1998     
fiscal year.                                                                    

The Company's capital asset strategy is to achieve low-cost production
through vertical integration and investment in the most current pasta-making    
assets and technologies. The manufacturing- and distribution-                   

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related capital assets which have been or will be acquired to support this      
strategy are depreciated over their respective economic lives. Because of the   
capital intensive nature of the Company's business and its current and future   
facilities expansion plans, management believes its depreciation expense for    
production and distribution assets may be higher than that of many of its       
competitors. Depreciation expense is a component of inventory cost and cost of  
goods sold. Plant expansion costs include incremental direct and indirect       
manufacturing and distribution costs which are incurred as a result of          
construction, commissioning and start-up of new capital assets. These costs are 
expensed as incurred but are unrelated to current production and, therefore,    
reported as a separate line item in the statement of operations.                

   Selling and marketing expense incurred to support retail sales are higher
than those for institutional sales, as the Company incurs external broker       
commissions, and promotional and other marketing expenses in addition to the    
costs incurred by its internal retail sales force. The Company is not           
responsible for selling and marketing expense related to the Bestfoods          
Agreement. Consequently, the Company expects prospective selling and marketing  
expense as a percentage of revenues to decrease relative to historical levels as
the Company generates additional Bestfoods revenues in 1998.                    

     At September 30, 1997, the Company had a net operating loss carryforward of
approximately $26.8 million for federal income tax purposes. The net operating  
loss carryforward resulted principally from the Company's significant tax       
depreciation deductions related to its capital assets. Subject to certain       
limitations, the Company expects this net operating loss carryforward will be   
available to offset future taxable income.                                      

RECENT DEVELOPMENTS                                                             

On April 3, 1998, AIPC completed its second fiscal quarter. For the   
three-month period ended March 31, 1998, the Company reported net income of $.23
per share assuming dilution.                                                    

  Revenues for the three-month period ended March 31, 1998 increased $13.9
million, or 43.3% to $46.0 million, from $32.1 million for the three-month      
period ended March 31, 1997. The increase was primarily due to volume growth    
from existing and new customers, including Bestfoods, favorable changes in sales
mix, and increases in average sales prices related to the pass through of higher
durum wheat costs.                                                              

     Gross profit for the three-month period ended March 31, 1998 increased $2.7
million, or 32.1%, to $11.1 million, from $8.4 million for the three-month      
period ended March 31, 1997, which was generally related to the growth in       
revenues. The gross margin percentage for the three-month period ended March 31,
1998 decreased to 24.1% from 26.2% for the three-month period ended March 31,   
1997. The expected decrease was primarily due to changes in sales mix,          
specifically, the lower gross margin on Bestfoods Mueller's pasta sales, plant  
expansion costs and higher durum wheat costs.                                   

    Operating profit for the three-month period ended March 31, 1998 increased
$2.4 million, or 54.5%, to $6.8 million, from $4.4 million for the three-month  
period ended March 31, 1997. Second quarter operating profit as a percentage of 
revenues improved to 14.8%, a 1.1% gain over 1997. These improvements reflect   
the gross profit gains and the absence of product introduction costs, which were
$.6 million in the three-month period ended March 31, 1997.                     

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    The following table sets forth certain statement of operations data of the
Company for the three-month period ended March 31, 1998, compared to the        
three-month period ended March 31, 1997:                                        

                                                        [Enlarge/Download Table]

                                                                 THREE-MONTH PERIOD    
                                                                       ENDED           
                                                                     MARCH 31,         
                                                             --------------------------
                                                                1997           1998    
                                                             -----------    -----------
                                                             (UNAUDITED)    (UNAUDITED)
                                                                (IN THOUSANDS EXCEPT   
                                                                  PER SHARE DATA)      
                                                                                       
Revenues:                                                                              
  Retail....................................................   $17,700        $32,057  
  Institutional.............................................    14,417         13,977  
                                                               -------        -------  
  Total revenues............................................    32,117         46,034  
Cost of goods sold..........................................    23,729         34,506  
Plant expansion costs.......................................        --            421  
Gross profit................................................     8,388         11,107  
Selling and marketing expenses(1)...........................     2,996          3,118  
General and administrative expenses.........................     1,016          1,185  
                                                               -------        -------  
Operating profit............................................     4,376          6,804  
Interest expense, net.......................................     2,740            225  
                                                               -------        -------  
Income before income tax expense............................     1,636          6,579  
Income tax provision........................................       615          2,500  
                                                               -------        -------  
Net income..................................................   $ 1,021        $ 4,079  
                                                               =======        =======  
Earnings per common share:                                                             
  Net income per common share...............................   $   .10        $   .24  
                                                               =======        =======  
Weighted average common shares outstanding..................    10,230         16,777  
                                                               =======        =======  
Earnings per common share -- assuming dilution:                                        
  Net income per common share...............................   $   .10        $   .23  
                                                               =======        =======  
Weighted average common shares outstanding..................    10,335         17,572  
                                                               =======        =======  

---------------                                                                 

(1) Includes product introduction costs related to the 1996 retail introduction 
   of Pasta LaBella Flavored Pasta of $.6 million for the period ended March
31, 1997. There were no such costs in the current period.             

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RESULTS OF OPERATIONS                                                           

    The following table sets forth certain statement of operations data of the
Company, expressed as a percentage of revenues, for each of the periods         
presented. This table should be read in conjunction with the Financial          
Statements and related Notes thereto appearing elsewhere in this Prospectus:    

                                                        [Enlarge/Download Table]

                                                                   NINE-MONTH                                   THREE-MONTH  
                       FISCAL YEAR   TWELVE-MONTH   NINE-MONTH    FISCAL PERIOD  TWELVE-MONTH    FISCAL YEAR   PERIODS ENDED 
                          ENDED      PERIOD ENDED  PERIOD ENDED       ENDED      PERIOD ENDED       ENDED      DECEMBER 31,  
                       DECEMBER 31,  DECEMBER 31,  SEPTEMBER 30,  SEPTEMBER 30,  SEPTEMBER 30,  SEPTEMBER 30,  ------------- 
                           1995          1996          1995           1996           1996           1997       1996    1997  
                       ------------  ------------  -------------  -------------  -------------  -------------  -----   ----- 
                                                                                                                             
Revenues:                                                                                                                    
  Retail.............      53.1%         59.6%          51.4%          60.7%          59.5%          56.7%      56.3%   63.4%
  Institutional......      46.9          40.4           48.6           39.3           40.5           43.3       43.7    36.6 
                          -----         -----          -----          -----          -----          -----      -----   ----- 
Total revenues.......     100.0%        100.0%         100.0%         100.0%         100.0%         100.0%     100.0%  100.0%
                          -----         -----          -----          -----          -----          -----      -----   ----- 
Cost of goods sold...      79.5          73.8           80.8           74.5           75.3           72.4       71.6    72.5 
Gross profit before                                                                                                          
  plant expansion                                                                                                            
  costs..............      20.5          26.2           19.2           25.5           24.7           27.6       28.4    27.5 
Plant expansion                                                                                                              
  costs..............       2.2            --            2.6             --             --             --         --      .7 
                          -----         -----          -----          -----          -----          -----      -----   ----- 
Gross profit.........      18.3          26.2           16.6           25.5           24.7           27.6       28.4    26.8 
Selling and marketing                                                                                                        
  expense, including                                                                                                         
  product                                                                                                                    
  introduction                                                                                                               
  costs..............       5.7          17.5            5.7           18.2           15.2           10.6       15.1     7.4 
General and                                                                                                                  
  administrative                                                                                                             
  expense............       3.2           2.9            3.2            3.0            3.0            2.9        2.3     3.4 
                          -----         -----          -----          -----          -----          -----      -----   ----- 
Operating profit.....       9.4           5.8            7.7            4.3            6.5           14.1       11.0    16.0 
Interest expense,                                                                                                            
  net................       8.6           8.7            8.2            8.7            8.9            7.8        8.6      .7 
Income tax...........        .3          (1.1)           (.2)          (1.7)           (.9)           2.4         .9     5.8 
Extraordinary loss,                                                                                                          
  net of income                                                                                                              
  tax................        --           1.4             --            1.8            1.4             --         --     6.6 
                          -----         -----          -----          -----          -----          -----      -----   ----- 
Net income (loss)....        .5%         (3.2)%          (.3)%         (4.5)%         (2.9)%          3.9%       1.5%    2.9%
                          =====         =====          =====          =====          =====          =====      =====   ===== 

THREE-MONTH PERIOD ENDED DECEMBER 31, 1997 COMPARED TO THE THREE-MONTH
PERIOD ENDED                                                                    
DECEMBER 31, 1996                                                     

    Revenues.  Revenues increased $6.0 million, or 20.3%, to $35.5 million for
the three-month period ended December 31, 1997, from $29.5 million for the      
three-month period ended December 31, 1996. The increase for the three-month    
period ended December 31, 1997 was primarily due to increases in unit volume,   
favorable changes in sales mix, and increases in average sales prices related to
the pass through of higher durum wheat costs. Approximately $2.8 million in     
revenues related to initial shipments of Mueller's brand pasta to Bestfoods.    
Management expects continued increases in revenues as a result of the Company's 
long-term supply agreement with Bestfoods.                                      

   Revenues for the Retail market increased $5.9 million, or 35.5%, to $22.5
million for the three-month period ended December 31, 1997, from $16.6 million  
for the three-month period ended December 31, 1996. The increase primarily      
reflects gains in private label volumes and Bestfoods volumes and average sales 
price increases related to the pass through of higher durum wheat costs offset  
by lower sales volumes of Pasta LaBella flavored pasta as the prior period      
included heavy introductory "pipeline" shipments.                               

 Revenues for the Institutional market increased $.1 million, or .8%, to
$13.0 million for the three-month period ended December 31, 1997, from $12.9    
million for the three-month period ended December 31, 1996.                     

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This increase was primarily a result of increases in average sales prices       
related to the pass through of higher durum wheat costs offset by decreases in  
spot contract business volumes due to capacity constraints in the current       
quarter. Non-contract unit volumes in the Institutional market generally        
remained consistent between periods.                                            

Gross Profit.  Gross profit increased $1.1 million, or 13.1%, to $9.5 
million for the three-month period ended December 31, 1997, from $8.4 million   
for the three-month period ended December 31, 1996. This increase is generally  
related to revenue growth. Gross profit as a percentage of revenues decreased to
26.8% for the three-month period ended December 31, 1997 from 28.4% for the     
three-month period ended December 31, 1996. The decrease in gross profit as a   
percentage of revenues relates to generally lower gross margin Bestfoods        
volumes, lower sales volumes of higher margin flavored pasta products, plant    
expansion costs, and higher durum wheat costs. Management expects continued     
increases in gross profit as a result of continued revenue increases. However,  
management expects gross profit as a percentage of revenues to continue to      
decrease based on the anticipated higher Bestfoods volumes and related revenue  
share and further plant expansion costs.                                        

 Selling and Marketing Expense.  Selling and marketing expense decreased
$1.9 million, or 42.2%, to $2.6 million for the three-month period ended        
December 31, 1997, from $4.5 million for the three-month period ended December  
31, 1996. Selling and marketing expense as a percentage of revenues decreased to
7.4% for the three-month period ended December 31, 1997, from 15.1% for the     
three-month period ended December 31, 1996. The decrease was primarily due to   
the absence of product introduction costs incurred in the Company's fiscal 1997 
retail introduction of Pasta LaBella flavored pasta. The Company did not incur  
product introduction costs for the three-month period ended December 31, 1997,  
compared to $1.4 million of such costs for the three-month period ended December
31, 1996. The decrease in product introduction costs was due to the completion  
of the flavored pasta 1997 launch program.                                      

 General and Administrative Expense.  General and administrative expense
increased $.5 million, or 71.4%, to $1.2 million for the three-month period     
ended December 31, 1997, from $.7 million for the three-month period ended      
December 31, 1996, and increased as a percentage of revenues to 3.4% for the    
three-month period ended December 31, 1997 from 2.4% for the three-month period 
ended December 31, 1996. The majority of the increase in general and            
administrative expense relates to the one-time realization of a $.3 million     
property tax abatement in South Carolina during the three-month period ended    
December 31, 1996. The benefit was realized in 1996 as a result of the Company's
reaching certain capital expansion levels in Columbia, S.C. which qualified the 
Company for incremental property tax abatements.                                

  Operating Profit.  Operating profit increased $2.4 million, or 72.7%, to
$5.7 million for the three-month period ended December 31, 1997, from $3.3      
million for the three-month period ended December 31, 1996, and increased as a  
percentage of revenues to 16.1% for the three-month period ended December 31,   
1997, from 11.2% for the three-month period ended December 31, 1996 as a result 
of the factors discussed above.                                                 

     Interest Expense.  Interest expense decreased $2.3 million, or 88.5% to $.3
million, for the three-month period ended December 31, 1997, from $2.6 million  
for the three-month period ended December 31, 1996. The decrease was primarily  
the result of reduced borrowings under the Company's Credit Facility as a result
of the $86.7 million in net proceeds realized from the Company's October 1997   
initial public offering of Class A Common Stock.                                

    Income Tax.  Income tax expense increased $1.8 million, or 600.0%, to $2.1
million for the three-month period ended December 31, 1997, from $0.3 million   
for the three-month period ended December 31, 1996, and reflects an effective   
income tax rate of approximately 38%.                                           

     Extraordinary Item.  During the three-month period ended December 31, 1997,
the Company incurred a $2.3 million (net of tax) extraordinary loss due to the  
write-off of deferred debt issuance costs in conjunction with the extinguishment
and restructuring of the Company's principal bank credit agreement. There was no
such item for the three-month period ended December 31, 1996.                   

   Net Income.  Net income increased $.6 million, or 150.0%, to $1.0 million
for the three-month period ended December 31, 1997, from $0.4 million for the   
three-month period ended December 31, 1996. Diluted                             
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earnings per common share before the extraordinary item was $.19 per share for  
the three-month period ended December 31, 1997 compared to $.04 per share for   
the three-month period ended December 31, 1996. Diluted earnings per share after
the extraordinary item was $0.06 per share for the three-month period ended     
December 31, 1997 compared to $.04 per share in the comparable prior year       
period.                                                                         

    FISCAL YEAR ENDED SEPTEMBER 30, 1997 COMPARED TO TWELVE-MONTH PERIOD ENDED
SEPTEMBER 30, 1996                                                              

    Revenues.  Revenues increased $8.0 million, or 6.6%, to $129.1 million for
the fiscal year ended September 30, 1997, from $121.1 million for the           
twelve-month period ended September 30, 1996. The increase for the fiscal year  
ended September 30, 1997 was primarily due to increases in unit volume. The     
revenues increase was lower than historical periods as the Company planned for  
and achieved higher than historical capacity utilization levels which precluded 
more significant unit and revenue growth. Management expects increased revenue  
as a result of the long-term supply agreement with Bestfoods.                   

  Revenues for the Retail market increased $1.2 million, or 1.7%, to $73.3
million for the fiscal year ended September 30, 1997, from $72.1 million for the
twelve-month period ended September 30, 1996. The increase reflects gains in    
private label volumes and lower retail sales volumes of Pasta LaBella flavored  
pasta as the prior period included introductory "pipeline" full shipments.      

    Revenues for the Institutional market increased $6.8 million, or 13.9%, to
$55.9 million for the fiscal year ended September 30, 1997, from $49.1 million  
for the twelve-month period ended September 30, 1996. This was primarily the    
result of volume gains in ingredient, foodservice, and Contract Sales which were
partially offset by durum wheat related price reductions and changes in sales   
mix.                                                                            

Gross Profit.  Gross Profit increased $5.8 million, or 19.4%, to $35.7
million for the fiscal year ended September 30, 1997, from $29.9 million for the
twelve-month period ended September 30, 1996. Gross profit as a percentage of   
revenues increased to 27.6% for the fiscal year ended September 30, 1997 from   
24.7% for the twelve-month period ended September 30, 1996. These increases were
the result of increases in revenues and lower product costs due to improved     
plant efficiencies and capacity utilization.                                    

 Selling and Marketing Expense.  Selling and marketing expense decreased
$4.7 million, or 25.5%, to $13.7 million for the fiscal year ended September 30,
1997, from $18.4 million reported for the twelve-month period ended September   
30, 1996. Selling and marketing expense as a percentage of revenues decreased to
10.6% for the fiscal year ended September 30, 1997, from 15.2% for the          
comparable prior period. The decrease was primarily due to lower product        
introduction costs incurred in the Company's retail introduction of Pasta       
LaBella flavored pasta. The Company incurred $2.9 million of product            
introduction costs for the fiscal year ended September 30, 1997, as compared to 
$8.1 million for the twelve-month period ended September 30, 1996. The decrease 
in product introduction costs was due to a reduction in introduction activities 
as the Company completed its retail launch. The decrease in product introduction
costs was partially offset by increases in other selling and marketing expenses 
which supported incremental private label and branded revenues.                 

 General and Administrative Expense.  General and administrative expense
increased $.1 million, or 2.7%, to $3.8 million for the fiscal year ended       
September 30, 1997, from $3.7 million for the twelve-month period ended         
September 30, 1996. General and administrative expense as a percentage of       
revenues decreased to 2.9% for the fiscal year ended September 30, 1997 from 3% 
for the twelve-month period ended September 30, 1996.                           

   Operating Profit.  Operating profit increased $10.4 million, or 133.3% to
$18.2 million for the fiscal year ended September 30, 1997, from $7.8 million   
for the twelve-month period ended September 30, 1996. Excluding product         
introduction costs, operating profit increased $5.2 million, or 32.9%, to $21.1 
million for the fiscal year ended September 30, 1997, from $15.9 million for the
twelve-month period ended September 30, 1996, and increased as a percentage of  
revenues to 16.3% for the fiscal year ended September 30, 1997, from 13.1% for  
the twelve-month period ended September 30, 1996.                               

     Interest Expense.  Interest expense for the fiscal year ended September 30,
1997, was $10.1 million, decreasing 6.5% from the $10.8 million reported for the
twelve-month period ended September 30, 1996. The                               

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decrease was primarily the result of reduced borrowings under the Company's     
prior term and revolving credit facilities resulting from the $22.3 million in  
proceeds realized from the April 1997 private equity financing.                 

    Income Tax.  Income tax increased $4.2 million, or 381.8%, to $3.1 million
for the fiscal year ended September 30, 1997, from $(1.1) million for the       
twelve-month period ended September 30, 1996, and reflects an effective income  
tax rate of approximately 38%.                                                  

Extraordinary Item. During the twelve-month period ended September 30,
1996, the Company incurred a $1.6 million (net of tax) extraordinary loss due to
the write-off of deferred debt issuance costs in conjunction with a partial     
extinguishment and restructuring of the Company's principal bank credit         
agreement. There was no such item for the year ended September 30, 1997.        

    Net Income.  Net income increased $8.6 million, or 245.7%, to $5.1 million
for the fiscal year ended September 30, 1997, from $(3.5) million for the       
twelve-month period ended September 30, 1996. Diluted earnings per common share 
before the extraordinary item was $.42 per share for the fiscal year ended      
September 30, 1997 compared to $(.18) per share for the twelve-month period     
ended September 30, 1996. Diluted earnings per share after the extraordinary    
item was $.42 per share for the fiscal year ended September 30, 1997 compared to
$(.34) per share in the comparable prior year period.                           

NINE-MONTH FISCAL PERIOD ENDED SEPTEMBER 30, 1996 COMPARED TO THE     
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1995                                      

     Revenues.  Revenues increased $28.3 million, or 44.4%, to $92.1 million for
the nine-month fiscal period ended September 30, 1996, from $63.8 million for   
the nine-month period ended September 30, 1995. This increase was primarily due 
to higher unit volume, favorable changes in product sales mix and higher average
prices resulting from the introduction of the Company's new, higher-priced Pasta
LaBella flavored pasta.                                                         

    Revenues for the Retail market increased $23.1 million, or 70.4%, to $55.9
million for the nine-month fiscal period ended September 30, 1996, from $32.8   
million for the nine-month period ended September 30, 1995. This increase was   
due to (i) higher sales volume, with the largest increases coming from private  
label and club stores customers; (ii) higher average unit prices due to the     
introduction of the Company's new, higher-priced Pasta LaBella flavored pasta   
into the U.S. retail grocery market; (iii) improved product sales mix in the    
club store category; and (iv) the pass-through of higher durum wheat costs.     

    Revenues for the Institutional market increased $5.2 million, or 16.8%, to
$36.2 million for the nine-month fiscal period ended September 30, 1996, from   
$31.0 million for the nine-month period ended September 30, 1995. The volume    
gains in ingredient and foodservice categories were partially offset by lower   
Contract Sales volumes as available production capacity was utilized by retail  
sales growth. The average 1996 institutional unit price also increased due to   
the pass-through of higher durum wheat costs.                                   

  Gross Profit.  Gross profit increased $12.9 million, or 121.7%, to $23.5
million for the nine-month fiscal period ended September 30, 1996, from $10.6   
million for the nine-month period ended September 30, 1995. Gross profit as a   
percentage of revenues increased to 25.5% for the nine-month fiscal period ended
September 30, 1996, from 16.6% for the nine-month period ended September 30,    
1995. These increases were primarily the result of: (i) higher sales volumes;   
(ii) higher average unit prices, primarily as a result of Pasta LaBella flavored
pasta sales; (iii) the absence of plant expansion costs; (iv) lower per unit    
warehousing and distribution costs resulting from outsourcing logistics         
functions through a new strategic alliance with Lanter Company; and (v) improved
plant efficiencies and capacity utilization, including the impact of the new    
South Carolina production and distribution facilities.                          

 Selling and Marketing Expense.  Selling and marketing expense increased
$13.1 million, or 354.1%, to $16.8 million for the nine-month fiscal period     
ended September 30, 1996, from $3.7 million for the nine-month period ended     
September 30, 1995. Selling and marketing expense as a percentage of revenues   
increased to 18.2% for the nine-month fiscal period ended September 30, 1996    
from 5.7% for the nine-month period ended September 30, 1995. These increases in
selling and marketing expense were primarily due to the Company's incurrence of 
$8.1 million of product introduction costs during the nine-month fiscal period  
ended September 30, 1996 related to the retail introduction of the Company's    
Pasta LaBella flavored pasta products. These costs included payment of product  
placement fees or "slotting," introductory consumer sampling, couponing,        
advertising and trade promotions. There were no comparable 1995 expenditures.   
Selling and                                                                     

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marketing expenses also increased due to Pasta LaBella flavored pasta sales and 
increases in club store and private label revenues.                             

 General and Administrative Expense.  General and administrative expense
increased $.8 million, or 40.0%, to $2.8 million for the nine-month fiscal      
period ended September 30, 1996, from $2.0 million for the nine-month period    
ended September 30, 1995. General and administrative expense as a percentage of 
revenues decreased to 3.0% for the nine-month fiscal period ended September 30, 
1996 from 3.2% for the nine-month period ended September 30, 1995. The increase 
in general and administrative expense was primarily due to increases in MIS     
expenses and communication costs incurred to support sales growth and the       
commencement of operations in South Carolina.                                   

     Operating Profit.  Operating profit decreased $1.0 million,or 20.4% to $3.9
million for the nine-month fiscal period ended September 30, 1996 from $4.9     
million for the nine-month period ended September 30, 1995. Excluding product   
introduction costs, operating profit increased to $12.0 million, or 144.9%, from
$4.9 million and increased as a percentage of revenue to 13.0% for the          
nine-month fiscal period ended September 30, 1996 from 7.7% for the nine-month  
period ended September 30, 1995.                                                

  Interest Expense.  Interest expense increased $2.7 million, or 50.9%, to
$8.0 million for the nine-month fiscal period ended September 30, 1996 from $5.3
million for the nine-month period ended September 30, 1995, due to higher       
borrowing levels to finance the Company's South Carolina and Missouri capital   
assets expansion and increases in working capital.                              

Income Tax.  Income tax decreased to $(1.6) million for the nine-month
fiscal period ended September 30, 1996, from $(0.1) million for the nine-month  
period ended September 30, 1995 and reflected an effective income tax rate of   
approximately 38% in both periods.                                              

  Extraordinary Item.  During the nine-month fiscal period ended September
30, 1996, the Company incurred a $1.6 million (net of tax) extraordinary loss   
due to the write-off of deferred debt issuance costs in conjunction with a      
partial extinguishment and restructuring of the Company's principal bank credit 
agreement. There was no such item for the nine-month period ended September 30, 
1995.                                                                           

  Net Income.  Net income decreased $4.0 million to $(4.2) million for the
nine-month fiscal period ended September 30, 1996, from $(0.2) million for the  
nine-month period ended September 30, 1995.                                     

 CALENDAR YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE FISCAL YEAR ENDED
DECEMBER 31, 1995                                                               

     The calendar year ended December 31, 1996 does not conform to the Company's
fiscal year and is discussed below only for purposes of comparison with the     
Company's fiscal year ended December 31, 1995.                                  

  Revenues.  Revenues increased $28.7 million, or 30.9%, to $121.6 million
for the calendar year ended December 31, 1996, from $92.9 million for the fiscal
year ended December 31, 1995. This increase was due to higher unit volume,      
higher average unit price from the mid-1996 introduction of the Company's new   
higher-priced Pasta LaBella flavored pasta into the U.S. Retail grocery market  
and improvements in product sales mix.                                          

    Revenues for the Retail market increased $23.1 million, or 46.9%, to $72.4
million for the calendar year ended December 31, 1996, from $49.3 million for   
the fiscal year ended December 31, 1995. This increase was due to (i) higher    
average unit prices associated with the introduction of the Company's new,      
higher-priced Pasta LaBella flavored pasta into the U.S. retail grocery market  
in mid-1996; (ii) higher unit volume, with the largest increases coming from the
private label and club store customers; (iii) improved product sales mix; and   
(iv) the pass-through of higher durum wheat costs.                              

   Revenues for the Institutional market increased $5.6 million, or 12.8% to
$49.2 million for the calendar year ended December 31, 1996 from $43.6 million  
for the fiscal year ended December 31, 1995. The ingredient and foodservice     
volume gains were partially offset by lower Contract Sales volumes as available 
capacities were utilized by retail unit growth. The average 1996 institutional  
unit price increased due to the pass-through of higher durum wheat costs.       

 Gross Profit.  Gross profit increased $14.9 million, or 87.6%, to $31.9
million for the calendar year ended December 31, 1996, from $17.0 million for   
the fiscal year ended December 31, 1995. Gross profit as a percentage of        
revenues increased to 26.2% for the calendar year ended December 31, 1996, from 
18.3% for the                                                                   

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fiscal year ended December 31, 1995. These increases were primarily the result  
of: (i) higher unit volumes; (ii) higher average unit prices, primarily due to  
Pasta LaBella flavored pasta sales; (iii) lower durum wheat costs; (iv) the     
absence of plant expansion costs; and (v) lower per unit warehousing and        
distribution costs resulting from outsourcing logistics functions through a new 
strategic alliance with Lanter Company.                                         

 Selling and Marketing Expense.  Selling and marketing expense increased
$16.0 million, or 301.9%, to $21.3 million for the calendar year ended December 
31, 1996, from $5.3 million for the fiscal year ended December 31, 1995. Selling
and marketing expense grew as a percentage of revenue to 17.5% for the calendar 
year ended December 31, 1996, from 5.7% for the fiscal year ended December 31,  
1995. This increase was due to the Company's incurrence of $9.6 million of      
product introduction costs during the calendar year ended December 31, 1996     
related to the retail introduction of the Company's Pasta LaBella flavored pasta
products. These costs included payment of fees for product placement or         
"slotting," introductory consumer sampling, couponing, advertising and trade    
promotions. There were no comparable 1995 expenditures. In addition to product  
introduction costs, selling and marketing expenses also increased due to the    
larger retail revenues associated with Pasta LaBella flavored pasta and         
increases in club store and private label sales.                                

 General and Administrative Expense.  General and administrative expense
increased $.6 million, or 20.7%, to $3.5 million for the calendar year ended    
December 31, 1996 from $2.9 million for the fiscal year ended December 31, 1995,
but decreased as a percentage of revenues from 3.2% to 2.9% over the same       
period. The increase in general and administrative expense was primarily due to 
increases in MIS expenses and communication costs incurred to support sales     
growth and the operations in South Carolina.                                    

  Operating Profit.  Operating profit decreased $1.6 million, or 18.2%, to
$7.2 million for the calendar year ended December 31, 1996, from $8.8 million   
for fiscal year ended December 31, 1995 and decreased as a percentage of revenue
to 5.9% for the calendar year ended December 31, 1996, from 9.4% for the fiscal 
year ended December 31, 1995. Excluding product introduction costs, operating   
profit increased by $8.0 million, or 90.9%, to $16.8 million for the calendar   
year ended December 31, 1996, from $8.8 million for the fiscal year ended       
December 31, 1995 and increased as a percentage of revenue to 13.8% for the     
calendar year ended December 31, 1996 from 9.4% for the fiscal year ended       
December 31, 1995.                                                              

 Interest Expense.  Interest expense increased $2.6 million, or 32.5% to
$10.6 million for the calendar year ended December 31, 1996 from $8.0 million   
for fiscal year ended December 31, 1995, due to higher debt levels resulting    
from the incremental borrowings required to finance the Company's South Carolina
and Missouri capital asset expansion and increases in working capital.          

   Income Tax.  Income tax decreased to $(1.3) million for the calendar year
ended 1996 from $.3 million for the fiscal year ended 1995, and reflects an     
effective income tax rate of approximately 38% in both periods.                 

Extraordinary Item.  During calendar year ended December 31, 1996, the
Company incurred a $1.6 million (net of tax) extraordinary loss due to the      
write-off of deferred debt issuance costs in conjunction with a partial         
extinguishment and restructuring of the Company's principal bank credit         
agreement.                                                                      

  Net Income.  Net income decreased $4.3 million to $(3.8) million for the
calendar year ended December 31, 1996, from $.5 million for the fiscal year     
ended 1995.                                                                     

LIQUIDITY AND CAPITAL RESOURCES                                                 

     The Company's primary sources of liquidity are cash provided by operations,
sales of equity and borrowings under its Credit Facility. Historically, the     
Company has generated liquidity through the sale of equity, which proceeds have 
generally been used to reduce debt and finance capital expansions. The Company  
received approximately $86.7 million in net proceeds from the October 1997      
initial public offering of its Class A Common Stock, which was used to reduce   
indebtedness. Cash and temporary investments totaled $1.7 million, and working  
capital totaled $14.1 million on December 31, 1997.                             

The Company's net cash provided by operating activities totaled $3.3  
million for the three-month period ended December 31, 1997 compared to $2.5     
million for the three-month period ended December 31, 1996. This increase of $.8
million was primarily due to higher net income and the non-cash extraordinary   
loss due to early extinguishment of debt, offset by an increase in working      
capital.                                                                        

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Cash used in investing activities principally relates to the Company's
investments in manufacturing, distribution and milling assets. Capital          
expenditures were $26.3 million for the three-month period ended December 31,   
1997 compared to $.8 million in the comparable prior year period. Capital       
expenditures were $28.4 million for the fiscal year ended September 30, 1997 and
3.0 million for the nine-month period ended September 30, 1996 and were $38.8   
million for the fiscal year ended December 31, 1995, respectively. The increase 
in spending for the fiscal year ending September 30, 1997 was a result of the   
Company's initial expenditures of $23.7 million of the $86.0 million capital    
expansion program discussed above, which the Company expects to complete by June
1998. The increased spending in 1995 was primarily the result of the            
construction of the Company's South Carolina manufacturing and distribution     
facilities and Missouri distribution center. The increase in spending for the   
three-month period ended December 31, 1997 was a result of the Company's        
expenditures toward its $86.0 million South Carolina and Missouri capital       
expansion programs, which the Company expects to complete during fiscal year    
1998. Total spending to date related to the aforementioned capital expansion    
programs is approximately $71 million. The Company has current commitments for  
$35 million in raw material purchases for fiscal year 1998 and has approximately
$15 million in expenditures remaining under the previously referenced $86.0     
million capital expansion program. The Company anticipates the capital expansion
programs will be fully funded by the end of fiscal year 1998. The Company       
expects to fund these commitments from operations and borrowings under the      
Credit Facility. The Credit Facility currently has a credit commitment of $150.0
million and has scheduled commitment reductions which begin at the end of fiscal
year 1999. At this time, the current and projected borrowings under the Credit  
Facility do not exceed the facility's available commitment. The facility matures
at the end of fiscal year 2002. The Company anticipates that any borrowing      
outstanding at that time will be satisfied with funds from operations or will be
refinanced.                                                                     

Net cash provided by financing activities was $22.0 million for the   
three-month period ended December 31, 1997 compared to net cash used of $1.8    
million for the three-month period ended December 31, 1996. The $22.0 million is
primarily a result of: (i) $86.7 million in net proceeds from the October 1997  
initial public offering; (ii) $21.8 million proceeds from issuance of debt (net 
of $.3 million deferred debt issuance costs) offset by (iii) $86.2 million debt 
repayment.                                                                      

The Company plans to use the net proceeds from the Offering to pay a  
portion of the outstanding indebtedness under the Company's Credit Facility. The
Company currently uses cash to fund capital expenditures, repayments of debt and
working capital requirements. The Company expects that future cash requirements 
will principally be for capital expenditures, repayments of indebtedness under  
the Credit Agreement and working capital requirements.                          

The Company entered into an amended and restated credit agreement (the
"Credit Agreement") on October 17, 1997, which provides the Company with $150   
million in credit on an unsecured, revolving basis at interest rates which are  
250 basis points lower than the previous agreement. Interest is to be charged at
either the base rate (higher of prime or 1/2 of 1% in excess of the federal     
funds effective rate) or LIBOR plus an applicable margin based on a sliding     
scale of the ratio of the Company's total indebtedness divided by earnings      
before interest, taxes, depreciation and amortization (EBITDA). In addition, a  
commitment fee is to be charged on the unused facility balance based on the     
sliding scale of the Company's total indebtedness divided by EBITDA. The stated 
interest plus the commitment fee will be classified as interest expense. The    
Credit Agreement contains restrictive covenants which include, among other      
things, financial covenants requiring minimum and cumulative earnings levels and
limitations on the payment of dividends, stock purchases and the Company's      
ability to enter into certain contractual arrangements. Management does not     
expect these limitations to have a material effect on the Company's business or 
results of operations. The Company is in compliance with all financial covenants
contained in the new Credit Agreement.                                          

 Management believes that net cash provided by operating activities, net
cash provided by financing activities and the net proceeds of the Offering will 
be sufficient to meet the Company's expected capital and liquidity needs for the
foreseeable future.                                                             

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RECENTLY ISSUED ACCOUNTING STANDARDS                                            

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting        
Comprehensive Income." SFAS 130 establishes standards for the reporting and     
display of comprehensive income and its components. Comprehensive income        
includes all changes in equity during a period except those due to owner        
investments and distributions. It includes items such as foreign currency       
translation adjustments, and unrealized gains and losses on available-for-sale  
securities. This standard does not change the display or components of          
present-day net income. SFAS 130 is not expected to have a material impact on   
the Company.                                                                    

Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about   
Segments of an Enterprise and Related Information." This new standard requires  
companies to disclose segment data based on how management makes decisions about
allocating resources to segments and how it measures segment performance. SFAS  
131 requires companies to disclose a measure of segment profit or loss          
(operating income, for example), segment assets, and reconciliations to         
consolidated totals. It also requires entity-wide disclosures abut a company's  
products and services, its major customers and the material countries in which  
it holds assets and reports revenues. This statement is not expected to have a  
significant effect on the Company.                                              

EFFECT OF INFLATION                                                             

During the last three fiscal periods, inflation has not had a material
effect on the Company, other than to increase its cost of borrowing and raw     
materials. In general, however, the Company has been able to increase the       
majority of customer sales prices to recover significant raw material cost      
increases. However, changes in prices of the Company's pasta products and the   
pass-through of higher durum wheat costs to certain customers historically have 
lagged price increases in the Company's raw material costs.                     

YEAR 2000 COMPLIANCE                                                            

     The Company has reviewed its computer hardware and software systems and has
recently begun upgrading those systems through modification or replacement. The 
Company currently anticipates this upgrading to be completed during 1998.       

    The Company expects to incur approximately $100,000 in each fiscal quarter
beginning with the second quarter of 1998 through the first quarter of 1999 to  
resolve the Company's Year 2000 compliance issues. All expenses incurred in     
connection with Year 2000 compliance will be expensed as incurred, other than   
acquisitions of new software or hardware, which will be capitalized. See "Risk  
Factors -- Year 2000 Compliance."                                               

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BUSINESS

OVERVIEW                                                                        

 AIPC is the second largest and one of the fastest-growing producers and
marketers of pasta in North America. The Company commenced operations in 1988   
with the North American introduction of new, highly-efficient durum wheat       
milling and pasta production technology. Management believes that the Company's 
singular focus on pasta, vertically-integrated facilities, continued            
technological improvements and development of a highly-skilled workforce enable 
AIPC to produce high-quality pasta at costs below those of many of its          
competitors. Management believes that the combination of the Company's cost     
structure, the average age of its competitors' North American pasta production  
equipment and the growing pasta consumption in North America creates significant
opportunities for continued growth. The Company is on target to nearly double   
its capacity in June 1998 with the completion of the expansion of its Missouri  
facility. The Company's revenue and operating income were $135.1 million and    
$20.7 million, respectively, for the twelve-month period ended December 31,     
1997, and grew at CAGRs of 30% and 33%, respectively, over the five-year period 
ended December 31, 1997.                                                        

    The Company has rapidly established a significant market presence in North
America by developing strategic customer relationships with food industry       
leaders that have substantial pasta requirements. North American pasta          
consumption exceeded 5.0 billion pounds in 1995 and is expected to grow based on
industry trade sources and the Company's own analysis. The Company has a        
long-term supply agreement with Sysco, the nation's largest marketer and        
distributor of foodservice products. AIPC is now the exclusive producer of      
Mueller's, the largest pasta brand in the United States, pursuant to a long-term
manufacturing and distribution agreement with Bestfoods. AIPC is also the       
primary supplier of pasta to Sam's Club, the largest club store chain in the    
United States, and supplies private label and branded pasta to six of the 10    
largest grocery retailers in the United States, including Wal*Mart, A&P, Publix,
Albertsons, American Stores and Winn-Dixie. In recent months the Company has    
added several new customers including Harris Teeter, Spartan, Meijer and        
Ahold/Finast. In addition, AIPC has developed supply relationships with         
industrial users of pasta, such as Pillsbury, General Mills and Kraft Foods,    
which use the Company's pasta as an ingredient in branded food products.        

The Company produces more than 80 dry pasta shapes in two             
vertically-integrated production and distribution facilities, strategically     
located in Excelsior Springs, Missouri and Columbia, South Carolina. The        
construction of the Missouri plant in 1988 represented the first use in North   
America of a vertically-integrated, high-capacity pasta plant using Italian     
pasta production technology. Management believes that this plant continues to be
among the most efficient and highly-automated pasta facilities in North America.
The South Carolina plant, which commenced operations in 1995, produces only     
pasta shapes conducive to high-volume production and employs a highly-skilled,  
self-managed workforce. The Company recently completed a significant portion of 
its capital expenditure program initiated in 1997 which increased the Company's 
annual pasta production capacity to approximately 500 million pounds and added a
highly-automated durum wheat mill to its South Carolina plant. Management       
believes the South Carolina plant is now the largest and most efficient pasta   
producing facility in North America in terms of productivity and conversion cost
per pound. The Company anticipates that the planned additional capacity         
expansion at the Missouri facility, including new high-speed, high-output pasta 
production lines and expansion of its distribution facility, will be completed  
by June 1998. This expansion will increase the Company's annual production      
capacity to more than 600 million pounds.                                       

PROPOSED HARVEST STATES ALLIANCE                                                

In November 1997, the Company announced a letter of intent with Amber 
Milling Company, a division of Harvest States Cooperatives, one of the largest  
agribusiness cooperatives in the United States. The proposed business           
arrangement contemplates AIPC constructing a highly efficient, state-of-the-art 
pasta production facility adjacent to Harvest States' recently constructed wheat
mill in Kenosha, Wisconsin. Under the terms of the contemplated arrangement,    
Harvest States would transfer to AIPC the land and infrastructure for the       
facility and supply semolina and other raw materials to the proposed plant under
a long-term                                                                     

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supply agreement. AIPC anticipates the proposed facility would initially target 
the growing industrial pasta market. The Company estimates it would invest      
approximately $30 million in capital expenditures to construct the facility,    
with a targeted annual capacity of approximately 150 million pounds. The Harvest
States alliance is subject to final negotiations and agreement, several         
pre-conditions and board of directors' approval from both parties prior to July 
1, 1998. There can be no assurance that a definitive agreement will be reached  
or that, if reached, the Company will be able to implement successfully the     
Harvest States alliance. See "Risk Factors -- Failure to Implement Harvest      
States Alliance."                                                               

Management believes the Harvest States alliance would create strategic
advantages by: (i) accelerating the time line for constructing a third facility 
targeting the growing industrial pasta market; (ii) creating highly efficient   
capacity to support future growth; (iii) providing long-term access to the      
variety of raw materials needed to support the industrial pasta market (several 
of which AIPC cannot produce currently in its durum semolina mills); (iv) making
available rail and highway infrastructure for efficient distribution to AIPC's  
customers; and (v) providing access to Harvest States' durum wheat origination  
network, which is the largest in the United States, and handles over 50% of U.S.
durum wheat. The Harvest States alliance would expand AIPC's vertical           
integration strategy to Harvest States' Kenosha mill, one of North America's    
newest and most efficient mills. Additionally, Harvest States' Kenosha mill uses
the same high-quality, state-of-the-art milling equipment and technology as     
AIPC's existing mills, ensuring product consistency for existing customers.     

OPERATING STRATEGY                                                              

   The Company's operating strategy is to grow revenues and profitability by
offering customers the highest quality pasta products at competitive prices with
superior customer service. Key elements of the Company's operating strategy are 
to:                                                                             

          - Continue to Lead the Industry as a Low Cost Producer of High Quality
     Pasta.  AIPC has successfully implemented production and capital investment
strategies designed to achieve low-cost production of high-quality    
    products. AIPC has distinguished itself from most major pasta producers by
     vertically integrating the durum wheat milling function with the production
process, thereby allowing the Company to manage the grain procurement 
 process and better control the consistency, quality and cost of its raw
     materials. The Company has invested in new pasta making technology, process
controls and the development of a largely self-managed work force.    
    Management believes that its facilities are among the most efficient pasta
production facilities in North America in terms of productivity and   
     conversion cost per pound. AIPC actively manages plant capacity utilization
   to optimize its fixed asset base and profitability through Contract Sales
   to government agencies and other customers. The Company believes that its
 vertically-integrated processes and pasta production equipment produces
    pasta of superior color, texture, flavor and consistency. AIPC's logistics
strategy enables the Company to realize significant distribution cost 
     savings through its strategically-located distribution centers. The Company
  expects to realize additional operating efficiencies through the current
expansion programs at its existing facilities, and ongoing improvement
    programs. See "-- Proposed Harvest States Alliance" and "-- Facilities and
Expansion."                                                           

   - Expand Customer-Driven Strategy.  The Company is committed to
   developing and maintaining strategic relationships with customers who (i)
  are food industry leaders requiring a significant volume of high-quality
   pasta; (ii) have committed marketing and sales resources to growing their
pasta business; and (iii) pursue long-term supplier relationships. The
 Company has followed this strategy since commencing operations in 1988,
  beginning with an agreement with Sysco. For almost a decade, the Company
has been Sysco's primary pasta supplier. In addition, since 1994, the 
   Company has been the primary pasta supplier to Sam's Club. AIPC currently
supplies private-label and branded products to over 20 retail grocery 
    customers, including many of the largest U.S. grocery retailers. AIPC also
    supplies pasta to leading food processors such as Pillsbury, General Mills
and Kraft for use as a food ingredient. The Company is also the sole  
    producer of Mueller's, the largest pasta brand in the United States, under
the Bestfoods Agreement. Management believes that these strategic     
    relationships increase sales and operating efficiencies, facilitate AIPC's
 investment in new technology, create distribution synergies, and enable
closer involvement in its customers' pasta businesses.                
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  - Provide Superior Customer Service.  The Company develops and
     enhances customer relationships by providing superior service and technical
support to its customers. The Company has invested heavily in the     
development of a broad range of customer service programs, including  
 electronic data interchange (EDI) and efficient consumer response (ECR)
 programs which streamline the order, invoicing and inventory management
     functions. AIPC uses its customer response services and category management
    expertise, based in part on data supplied by A.C. Nielsen Co. ("Nielsen"),
     to assist customers in their supply management and merchandising decisions.
  AIPC's inventory management system is designed to optimize customer lead
     time, order fill rate and inventory turnover. To provide its customers with
 benefits in both transportation cost and delivery time, the Company has
    strategically located its distribution centers in Missouri, South Carolina
and California. The Company provides marketing, technical and service 
  support to its customers by assisting customers with supply and category
    management decisions, producing pasta to its customers' specifications and
making operational recommendations to its customers using pasta as an 
ingredient in their food products. AIPC is the only pasta producer to 
   sponsor an annual durum milling and pasta production technology forum, at
   which industry experts conduct a training and development program for the
 manufacturing and research and development personnel of food companies.

GROWTH STRATEGY                                                                 

     The Company continues to implement its growth strategy, which builds on the
Company's operating strategy and industry trends. Key elements of the Company's 
growth strategy are to:                                                         

         - Continue Bestfoods Business Expansion.  The Company was selected in
    1997 to be the exclusive producer of Bestfoods' Mueller's brand pasta, the
largest pasta brand in North America and has transferred production of
 substantially all of Mueller's primarily to its recently expanded South
 Carolina facility. Management believes that the Company's experience in
  servicing large pasta supply agreements and its current expansion of its
South Carolina and Missouri milling pasta production and distribution 
    facilities will enable AIPC to support potential future growth. Management
anticipates Bestfoods's annual volume requirements will represent an  
approximately 70% increase over the Company's fiscal 1997 production  
volume.                                                               

        - Obtain Additional Private Label Customers.  The Company intends to
continue to grow its existing private label customer base and secure  
     additional private label customers by continuing to offer quality products,
 competitive pricing, category management and superior customer service.
   Management believes that AIPC's prospects for growth in the private label
  market have been enhanced since Borden, historically the largest private
label supplier in North America, discontinued its private label pasta 
business in 1997.                                                     

        - Increase Sales to Industrial Customers.  The Company believes that
     industrial users of pasta will continue to require increasing quantities of
   pasta and that a greater portion of these requirements will be outsourced
     to more efficient producers of high-quality pasta, such as AIPC. Management
    has identified additional strategic opportunities with industrial users of
   pasta which may result in incremental growth, new product development and
   cost savings opportunities in the future. See "-- Proposed Harvest States
Alliance"                                                             

         - Continue Product Innovation.  In 1995, the Company introduced Pasta
     LaBella flavored pasta, a line of all natural, full-flavored pasta products
   utilizing patented flavoring technology and AIPC's proprietary production
process. In addition to pursuing increased sales with institutional   
     customers, the Company is exploring potential sales and marketing alliances
  to expand retail distribution of Pasta LaBella flavored pasta. AIPC also
  intends to continue assisting its customers with innovative products and
    packaging, and the development of additional value-added products intended
to generate higher margins than traditional pasta products.           

 The Company was incorporated under the laws of the State of Delaware in
1991, and is the successor by merger of a Colorado corporation incorporated in  
1986. The Company's executive offices are located at 1000 Italian Way, Excelsior
Springs, Missouri 64024, and its telephone number is (816) 502-6000. The        
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Company's home page on the World Wide Web is located at                         
http://www.pastalabella.com. Information contained in the Company's home page   
shall not be deemed to be a part of this Prospectus.                            

PASTA INDUSTRY                                                                  

     North American pasta consumption exceeded 5.0 billion pounds in 1995 and is
expected to grow based on industry and trade sources and the Company's own      
analysis. The pasta industry consists of two primary customer markets: (i)      
Retail, which includes grocery stores, club stores and mass merchants that sell 
branded and private label pasta to consumers; and (ii) Institutional, which     
includes both foodservice distributors that supply restaurants, hotels, schools 
and hospitals, as well as food processors that use pasta as a food ingredient.  
In 1996, the supermarket portion of the Retail market accounted for             
approximately 1.3 billion pounds, of which branded and private label pasta      
accounted for 1.0 billion and .3 billion pounds, respectively. Foodservice      
distributors, food processors and the U.S. government in the Institutional      
market accounted for the remainder of the volume, approximately 3.7 billion     
pounds, in 1996.                                                                

The expected increase in North American consumption is primarily      
attributable to the widespread recognition that pasta is an inexpensive,        
convenient and nutritious food. The U.S. Department of Agriculture places pasta 
on the foundation level of its pyramid of recommended food groups. Products such
as flavored pasta, prepared sauces, boxed pasta dinners, and both frozen and    
shelf-stable prepared pasta entrees support consumers' lifestyle demands for    
convenient at-home meals. Pasta continues to grow in popularity in restaurants  
as Americans continue to dine away from home more frequently.                   

Customer Markets                                                      

     Retail.  Hershey, Borden and Bestfoods together represent a majority of the
branded Retail market. Hershey, which primarily competes in the branded Retail  
market and whose retail brands include Ronzoni, San Giorgio, Skinner and        
American Beauty, is the industry leader and produced 24.0% of the total pounds  
sold in the branded Retail market for the 53 weeks ended September 30, 1997.    
Borden, which produced 20.4% of the total pounds sold in the Retail market for  
the 53 weeks ended June 30, 1997, has announced its intention to shift its      
strategy to focus on its branded pasta and sauce products, which include        
Creamette, Prince, Catelli, Merlino's and Anthony's, and to exit private label  
pasta production and sales. Bestfoods participates in the Retail market with    
Mueller's, the oldest and largest pasta brand in the United States. AIPC        
directly participates in the branded Retail market by producing and distributing
Pasta LaBella flavored pasta and will indirectly participate in such market by  
processing and distributing Mueller's brand pasta for Bestfoods. Bestfoods has  
transferred substantially all of its Mueller's brand pasta production to AIPC.  
See "-- Production and Supply Agreements."                                      

 Between the first quarter of 1994 and the first quarter of fiscal 1998,
sales of private label pasta products increased from 18.7% to 22.0% of the total
pounds of pasta sold in the Retail market based on Information Resources, Inc.  
InfoScan Review data. Management believes that sales of private label pasta     
products will continue to grow at a rate in excess of the overall Retail pasta  
market. Following Borden's departure from the private label market, AIPC has    
become one of the leading suppliers in the remaining fragmented market.         
Management believes that the private label category offers significant growth   
and profit opportunities to retailers and efficient producers. Retailers often  
prefer high-quality private label products to branded products because private  
label products typically enable retailers to generate higher margins and        
maintain greater control of in-store merchandising. While consumers             
traditionally have viewed private label products as having lower quality than   
branded products, management believes that new high-quality private label       
products have begun to change this perception. Management attributes some of    
this change in the private label market to the increasingly upscale image,      
improved packaging, higher product quality and competitive prices of private    
label products.                                                                 

Institutional.  The Institutional market includes both foodservice    
distributors that supply restaurants, hotels, schools and hospitals, as well as 
food processors that use pasta as a food ingredient. Traditional foodservice    
customers include businesses and organizations, such as Sysco and JP            
Foodservice, Inc., that sell products to restaurants, healthcare facilities,    
schools, hotels and industrial caterers. Most foodservice                       

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distributors obtain their supply of pasta from third party producers such as    
AIPC. The foodservice market is highly-fragmented and is served by numerous     
regional and local food distributors, including both "traditional" foodservice  
customers and chain restaurant customers. Sysco, the nation's largest           
foodservice marketer and distributor of foodservice products and one of the     
nation's largest commercial purchasers of pasta products, serves approximately  
10% of the foodservice business in the United States and has more than double   
the revenues of the next largest foodservice distributor.                       

 The Institutional market also includes sales to food processors who use
pasta as an ingredient in their food products such as frozen dinner entrees and 
side dishes, dry side dish mixes, canned soups and single-serve meals. Large    
food processors that use pasta as a food ingredient include Kraft Foods,        
International Home Foods, Inc., Stouffers Corp., Campbell Soup Company, ConAgra,
Inc., Pillsbury and General Mills. The consistency and quality of the color,    
starch release, texture, cooking consistency, and gluten and protein content of 
pasta produced for food processors is crucial to their products' success. As a  
result, food processors have stringent specifications for these attributes.     

The size of the Institutional market is affected by the number of food
processors that elect to produce pasta internally rather than outsourcing their 
production. Historically, most pasta used by food processors was manufactured   
internally for use in food processors' own products. Management believes,       
however, that an increasing number of food processors may discontinue the       
internal production of their own pasta and outsource their production to more   
efficient producers such as AIPC.                                               

Pasta Production Capacity                                             

 Management believes that pasta producers have historically rationalized
their existing production facilities. Within the past several years, however,   
there has been an increase in some pasta producers' capital reinvestment. Upon  
completion of the expansion of the Company's Missouri facility, AIPC will have  
increased its production capacity to over 600 million pounds since commencing   
operations in 1988. Several domestic pasta producers have recently completed    
production facility additions or announced their intention to increase domestic 
production capacity. In addition to AIPC's substantially completed capital      
expansion, management believes that these capacity additions represent more than
200 million pounds in aggregate. Dakota Growers increased the capacity of its   
durum wheat milling operations in December 1996 and has completed a pasta       
production capacity expansion increasing its total annual pasta production      
capacity to 240 million pounds. In late 1997 Hershey added approximately 25     
million pounds of pasta capacity to its facility in Winchester, Virginia.       
Barilla is currently building an integrated milling and pasta production        
facility near Ames, Iowa with an estimated annual pasta capacity between 130 and
155 million pounds scheduled for completion in late 1998 or early 1999. Two     
major pasta producers have also reduced pasta production capacity. Borden closed
or sold five of its ten North American pasta plants in 1997, and Bestfoods      
eliminated its capacity of approximately 180 million pounds. In addition, on    
February 23, 1998, Dakota Growers acquired all of the outstanding stock of Primo
Piatta, Inc. ("Primo"), a Minnesota-based pasta producer. Primo's assets include
two production facilities with total annual capacity of approximately 175       
million pounds and a distribution center located in Minneapolis. AIPC and Dakota
Growers are currently the only major pasta producers in the United States that  
own vertically-integrated milling and pasta production facilities. Barilla's    
planned facility in Ames, Iowa will also be vertically integrated.              

 Pricing pressures from Turkish and Italian pasta producers aggressively
targeting the U.S. markets have adversely affected returns and earnings of some 
U.S. producers in recent years. Management estimates pasta imported from foreign
producers during 1996 represented approximately 12% of the U.S. dry pasta       
market, and that of this amount, approximately two-thirds originated from       
producers in Italy and Turkey. The primary foreign suppliers of pasta with which
the Company competes are Barilla and De Cecco. In 1996, a U.S. Department of    
Commerce investigation revealed that several Italian and Turkish producers were 
engaging in unfair trade practices by selling pasta at less than fair value in  
the U.S. markets and benefitting from subsidies from their respective           
governments. Effective July 1996, the U.S. International Trade Commission       
imposed anti-dumping duties ranging from 2.8% to 46.7% on Italian imports and   
from 56.8% to 63.3% on Turkish imports, as well as countervailing duties ranging
from 1.2% to 11.2% on Italian imports and from 3.9% to 15.8% on Turkish imports.
The Department of Commerce currently is conducting an                           
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administrative review of its anti-dumping and countervailing duty orders of July
1996 relating to three Turkish and 16 Italian pasta producer, including Barilla 
and De Cecco. On January 22, 1998, the Department of Commerce indicated that it 
intends to issue preliminary findings not later than July 1, 1998, with the     
final results of its review expected by October 1, 1998. Although Italian and   
Turkish importers still participate in the major U.S. customer markets,         
management believes that these duties have significantly reduced the volume of  
low-priced pasta from Italy and Turkey. See "Risk Factors -- Competition."      

Raw Materials                                                         

     Pasta's primary ingredient is semolina, which is extracted from durum wheat
through a milling process. Almost all domestic pasta producers purchase semolina
from third party milling companies. Durum wheat is used exclusively for pasta.  
Each variety of durum wheat has its own unique set of protein, gluten content,  
moisture, density, color and other attributes which affect the quality and other
characteristics of the semolina. The Company blends semolina from different     
wheat varieties as needed to meet customer specifications.                      

 Durum wheat used in United States pasta production generally originates
from Canada, North Dakota, Montana, Arizona and California. Although durum wheat
can be purchased directly from farmers or grower-owned cooperatives, most       
milling companies purchase durum wheat on a commodity exchange. AIPC and Dakota 
Growers are the only major producers of pasta in North America that have        
vertically integrated milling and production facilities. See "Raw Materials and 
Supplies."                                                                      

PRODUCTS                                                                        

  AIPC's product line, comprising over 1,000 stock-keeping units ("SKUs"),
includes long goods such as spaghetti, linguine, fettuccine, angel hair and     
lasagna, and short goods such as elbow macaroni, mostaccioli, rigatoni, rotini, 
ziti and egg noodles. In many instances, the Company produces pasta to its      
customers' specifications. AIPC makes over 80 different shapes and sizes of     
pasta products in over 160 package configurations, including bulk packages for  
institutional customers and small individually-wrapped packages for retail sale 
to individual consumers. AIPC contracts with third parties for the production of
certain pasta shapes, such as retail lasagna and canneloni, which are           
specialized products, but which are necessary to offer customers a full range of
pasta products. Purchased pasta represented less than 2% of AIPC's total unit   
volume in fiscal periods 1997, 1996 and 1995.                                   

In fiscal 1995, AIPC introduced a product line of all natural,        
full-flavored pasta marketed under the Pasta LaBella brand. Pasta LaBella       
flavored pasta is principally marketed as a branded product to grocery retailers
and to Sysco. AIPC's all-natural, full-flavored dry pasta is available in a     
variety of flavors including tomato basil, lemon pepper, pesto, roasted garlic  
and herb, roasted bell pepper/roasted garlic, and cracked black pepper.         
Management believes that AIPC's use of patented flavoring ingredients under an  
exclusive license and a proprietary manufacturing process allows the Company to 
provide superior product quality and flavor delivery compared to competitive    
flavored pasta products. Pasta LaBella flavored pasta was recognized as one of  
the top 10 new products in the United States in 1996 by Food Processing         
Magazine. AIPC also intends to continue to assist its customers with innovative 
products and packaging, and the development of additional value-added products  
intended to generate higher margins than traditional pasta products.            

QUALITY                                                                         

  The Company believes that its state-of-the-art, Italian pasta production
equipment is capable of producing the highest quality pasta. AIPC's products are
produced to satisfy the specifications of the Company's customers as well as its
own product specifications, which management believes are among the highest in  
the industry. The Company's pasta is distinguished by a rich, natural "wheaty"  
taste and a consistently smooth and firm ("al dente") texture with a minimum    
amount of white spots or dark specks. AIPC evaluates the quality of its products
through: (i) internal laboratory evaluation of AIPC products against competitive
products on physical characteristics, including color, speck count, shape and   
consistency, and cooking performance, including starch release, protein content 
and bite; and (ii) competitive product comparisons that AIPC's customers perform
on a regular basis.                                                             

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     The Company submits its production facilities to semi-annual inspections by
the American Institute of Baking ("AIB"), the leading United States baking, food
processing and allied industries evaluation agency for sanitation and food      
safety. The Company consistently has achieved the AIB's highest "Superior"      
rating. The Company also implemented a comprehensive Hazard Analysis Critical   
Control Point ("HACCP") program five years ago to continuously monitor and      
improve the safety, quality and cost-effectiveness of the Company's facilities  
and products. The Company believes that having an AIB rating of "Superior" and  
meeting HACCP standards have helped the Company attract new business and        
strengthen existing customer relationships.                                     

PRODUCTION AND SUPPLY AGREEMENTS                                                

   The Company has established itself as one of the largest producers of dry
pasta in North America by establishing strategic production, supply and         
distribution arrangements with several food industry leaders, including         
Bestfoods and Sysco.                                                            

Under the Bestfoods Agreement, Bestfoods closed its pasta production  
facility formerly dedicated to the production of Mueller's brand pasta in       
December 1997 and AIPC became the exclusive producer of Mueller's, with the     
exception of two specialty items which Bestfoods currently purchases from       
another supplier. Bestfoods is a global food company, and its Mueller's pasta   
line is the oldest and largest pasta brand in the United States with an annual  
sales volume averaging approximately 200 million pounds over the last five      
years. AIPC is paid on a "cost plus" basis in an amount equal to total actual   
cost of production plus a guaranteed profit per pound of pasta produced.        
Bestfoods has guaranteed minimum purchase volumes of 175 million pounds annually
for nine years. AIPC may also benefit from additional cost savings resulting    
from improved productivity. The term of the contract is through December 31,    
2006 with a three-year renewal term at the option of Bestfoods. Without         
Bestfoods' consent, AIPC may not produce branded retail pasta for Borden,       
Hershey or Barilla, and is limited to the production of an aggregate of 12      
million pounds of branded pasta products annually for other producers. The      
Bestfoods Agreement may be terminated by Bestfoods upon certain events,         
including (i) a failure by AIPC to satisfy certain minimum production           
requirements for any reason other than the fault of Bestfoods or events         
demonstrably beyond AIPC's control, or (ii) AIPC's merger with, or sale of      
substantially all of its assets to, Borden, Hershey or Barilla.                 

    Pursuant to the Sysco Agreement, AIPC is the primary supplier of pasta for
Sysco and has the exclusive right to supply pasta to Sysco for sale under       
Sysco's brand names. Sysco, which operates from approximately 65 operations and 
distribution facilities nationwide, provides products and services to           
approximately 230,000 restaurants, hotels, schools, hospitals, and other        
institutions, as well as the U.S. government. For the twelve-month period ended 
December 31, 1997, sales attributed to Sysco represented approximately 27% of   
the Company's net revenues. Sysco recently exercised its option to renew its    
agreement with AIPC for an additional three years through June 30, 2000, and has
options to renew the agreement for additional three-year periods through June   
30, 2006. AIPC products are sold to Sysco on a cost-plus basis, with annual     
adjustments based on the prior year's costs. Under the Sysco Agreement, AIPC may
not supply pasta products to any business other than Sysco in the United States,
Mexico or Canada that operates as, or sells to, institutions and businesses     
which provide food for consumption away from home (i.e. foodservice businesses) 
without Sysco's prior consent. In 1996 and 1997, Sysco honored the Company as   
one of the 10 best of its 1,300 suppliers. The Sysco Agreement may be terminated
by Sysco upon certain events, including a substantial casualty to or            
condemnation of AIPC's Missouri plant.                                          

RAW MATERIALS AND SUPPLIES                                                      

AIPC's ability to produce high-quality pasta generally begins with its
purchasing durum wheat directly from farmers and grower-owned cooperatives in   
Canada, North Dakota, Montana, Arizona and California, rather than from grain   
exchanges. This direct purchasing method ensures that the extracted semolina    
meets AIPC's specifications since each variety of durum wheat has its own unique
set of milling and pasta making characteristics. The Company has several sources
for durum wheat and is not dependent on any one supplier. As a result, the      
Company believes that it has adequate sources of supply for durum wheat. The    
Company occasionally buys and sells semolina to balance its milling and         
production requirements.                                                        

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Durum wheat is a commodity crop whose average monthly market price has
fluctuated from a low of $5.18 per bushel to a high of $7.49 per bushel in the  
last four years. The February 1998 average price per bushel of durum wheat was  
$5.95. The Company manages its durum wheat cost risk through durum "pass-       
through" long-term contracts and other arrangements with its customers and      
advance purchase contracts for durum wheat which are generally less than six    
months' duration. Long-term supply agreements and other customer arrangements   
which allow for the pass-through of durum wheat cost changes in certain         
circumstances represented approximately 65% of AIPC's total revenue for the     
twelve-month period ended December 31, 1997. Management believes that the       
Company will significantly increase the percentage of revenues pursuant to      
contracts which include provisions for sales price adjustments as it generates  
Bestfoods revenues in 1998. See "Risk Factors -- Raw Materials" and             
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations."                                                                    

AIPC purchases its packaging supplies, including poly-cellophane,     
paperboard cartons, boxes and totes from third parties. Management believes the 
Company has adequate sources of packaging supplies.                             

FACILITIES AND EXPANSION                                                        

 Production Facilities.  AIPC's pasta production plants are located near
Kansas City in Excelsior Springs, Missouri, and in Columbia, South Carolina. The
Company's facilities are strategically located to support North American        
distribution of AIPC's products and benefit from the rail and interstate highway
infrastructure. At March 31, 1998, the Company's facilities had combined annual 
milling and production capacity of approximately 600 million pounds of durum    
semolina and 500 million pounds of pasta.                                       

     The Company has pursued a capacity expansion strategy over the past several
years. During 1994, the Company completed a $30.0 million expansion of the      
Missouri plant, increasing production capacity more than 70% to 230 million     
pounds per year and, at the same time, increased its durum wheat milling        
capacity over 100% to support pasta production of approximately 300 million     
pounds per year. In 1995, the Company added approximately 100 million pounds of 
pasta capacity by constructing its South Carolina plant.                        

AIPC has completed a significant portion of its $86.0 million capital 
expenditure program which, when completed, will nearly double its current pasta 
production capacity from 330 million pounds per year to approximately 600       
million pounds per year in 1998. The Company recently completed the construction
of a durum wheat mill in South Carolina which adjoins the existing plant        
facility, representing a 200% increase in the facility's pasta production       
capacity, and a doubling of the capacity of the South Carolina distribution     
facility. The additional capacity at the Missouri facility, scheduled for       
completion in June 1998, will combine high-speed, high-output pasta production  
lines with the ability to produce a full range of products, and will include a  
distribution center expansion. See "Use of Proceeds" and "Management's          
Discussion and Analysis of Financial Condition and Results of                   
Operations -- Liquidity and Capital Resources" and "Risk Factors -- Substantial 
Planned Investment in Milling and Production Facilities."                       

   To date, each of the Company's major capacity expansion programs has been
completed on schedule and within budget, and has delivered the targeted levels  
of output and efficiency. The current expansion of the Missouri facility is     
progressing on-time and on-budget. See "Risk Factors -- Substantial Planned     
Investments in Milling and Production Facilities" and "Management of Growth and 
Implementation of Bestfoods Business."                                          

     Proposed Harvest States Alliance. In November 1997, the Company announced a
letter of intent with Amber Milling Company, a division of Harvest States       
Cooperatives, one of the largest agribusiness cooperatives in the United States.
The proposed business arrangement contemplates AIPC constructing a highly       
efficient, state-of-the-art pasta production facility adjacent to Harvest       
States' recently constructed wheat mill in Kenosha, Wisconsin. Under the terms  
of the contemplated arrangement, Harvest States would transfer to AIPC the land 
and infrastructure for the facility and supply semolina and other raw materials 
to the proposed plant under a long-term supply agreement. AIPC anticipates the  
proposed facility would initially target the growing industrial pasta market.   
The Company estimates it would invest approximately $30 million in capital      
expenditures to construct the facility, with a targeted annual capacity of      
approximately 150 million pounds. The Harvest States alliance is subject to     
final negotiations and agreement, several pre-conditions and                    
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board of directors' approval from both parties prior to July 1, 1998. There can 
be no assurance that a definitive agreement will be reached or that, if reached,
the Company will be able to implement successfully the Harvest States alliance. 
See "Risk Factors -- Failure to Implement Harvest States Alliance."             

Management believes the Harvest States alliance would create strategic
advantages by: (i) accelerating the time line for constructing a third facility 
targeting the growing industrial pasta market; (ii) creating highly efficient   
capacity to support future growth; (iii) providing long-term access to the      
variety of raw materials needed to support the industrial pasta market (several 
of which AIPC cannot produce currently in its durum semolina mills); (iv) making
available rail and highway infrastructure for efficient distribution to AIPC's  
customers; and (v) providing access to Harvest States' durum wheat origination  
network, which is the largest in the United States, and handles over 50% of U.S.
durum wheat. The Harvest States alliance would expand AIPC's vertical           
integration strategy to Harvest States' Kenosha mill, one of North America's    
newest and most efficient mills. Additionally, Harvest States' Kenosha mill uses
the same high-quality, state-of-the-art milling equipment and technology as     
AIPC's existing mills, ensuring product consistency for existing customers.     

     Milling and Pasta Production Processes.  Durum wheat is currently delivered
to AIPC's mills in Missouri and South Carolina by railcar directly from the     
durum wheat elevators in the northern United States and Canada under a long-term
rail contract with the Canadian Pacific Rail System and the Norfolk Southern    
Railway Company. The wheat is then unloaded, blended and pre-cleaned. Next, the 
moisture content of the wheat is raised to the optimal level required for       
milling (the "tempering process"). The cleaned and tempered wheat is then       
conveyed to the mill where grinding, sifting, and purifying processes extract   
the purest possible semolina. The semolina milling is controlled from a central 
control room located in the mills where a single AIPC team member monitors and  
directs the mill's entire milling, cleaning and storage process.                

 After being mixed with water, the semolina is extruded into the desired
shapes and travels through computer-controlled high-temperature dryers and      
stabilized at room temperature. The Company's entire pasta production process is
controlled by programmable logic controllers which enable all of the production 
lines to be operated and monitored by minimal staff. The pasta is then packaged 
in a wide variety of packaging configurations on highly-automated film, carton  
and bulk packaging systems and forwarded through automated conveyors to the     
distribution center to be palletized and stored prior to shipment.              

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     The Company's vertically-integrated milling and pasta production process is
depicted in the following chart:                                                

AIPC'S MILLING AND PASTA PRODUCTION PROCESS 

MILLING AND PASTA PRODUCTION PROCESS GRAPH

   Distribution.  The Company's three distribution centers are strategically
located in South Carolina, Missouri and Southern California to serve a national 
market. The Company currently owns the distribution center adjoining its        
Missouri plant and leases its distribution center in South Carolina as well as  
space in a public warehouse in Pomona, California. The Company completed        
construction of the integrated warehousing and distribution facilities at its   
Missouri and South Carolina facilities during 1995 and recently completed the   
expansion of its South Carolina distribution facility. The warehousing and      
distribution facilities are integrated with the Company's production facilities 
which allows cased, finished products to be automatically conveyed via enclosed 
case conveying systems from the production facilities to the distribution       
centers for automated palletization and storage until shipping. The combination 
of integrated facilities and multiple distribution centers enables AIPC to      
realize significant distribution cost savings and provides lead time, fill rate 
and inventory management advantages to its customers. The operation of the      
Missouri and South Carolina distribution centers is outsourced under a long-term
agreement with Lanter Company, a firm specializing in warehouse and logistics   
management services. Most of the Company's customers use inventory management   
systems which track sales of particular products and rely on reorders being     
rapidly filled by suppliers. The                                                

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Company works with its customers to forecast consumer demand which allows the   
Company to anticipate customer demand.                                          

SALES AND MARKETING                                                             

    AIPC actively markets its products through approximately 19 internal sales
and marketing staff and approximately 30 independent food brokers and           
distributors throughout the United States. AIPC's senior management is directly 
involved in the selling process in all customer markets. The Company's sales and
marketing strategy is to provide superior quality, complete product offering,   
distinctive packaging specifically tailored to customers' needs, competitive    
pricing and superior customer service to attract new customers and grow existing
customers' pasta sales.                                                         

One of the Company's core strengths has been the development of strong
customer relationships and the establishment of a reputation as a technical and 
service expert in the pasta field. As part of its overall customer service      
strategy, AIPC uses its category management expertise to assist customers in    
their supply management decisions regarding pasta and new products. The         
Company's category management experts use on-line Nielsen's supermarket data to 
drive pasta category growth by recommending pricing, SKU sets and shelf spacing 
to both private label and branded customers. AIPC representatives also assist   
food processors in incorporating AIPC's pasta as an ingredient in its customers'
food products. The Company sponsors an annual "Pasta Technology Forum" which is 
a training and development program for its customers' production and new product
personnel. AIPC also produces and distributes a quarterly newsletter, the Pasta 
Advisor, to its institutional customers which contains recommendations regarding
storage, conveying, cooking and ingredient combination. In addition to technical
education, the Company provides dedicated technical support to its customers by 
making recommendations regarding the processing of pasta in their facilities.   
AIPC believes that these value-added activities provide customers with a better 
appreciation and awareness of the Company and its products.                     

  The Company consistently demonstrates its commitment to customer service
through the development of enhanced customer service programs. Examples of these
programs include the creation by AIPC of an ECR model which uses EDI and vendor 
replenishment programs to assist its key retail customers, and category         
management services for its private label and branded customers. These programs 
also enable the Company to more accurately forecast production and sales demand,
enabling higher utilization of production capacities and lower average unit     
costs. AIPC has also created a dedicated sales force for Sysco, its largest     
customer, to provide regional sales support.                                    

MANAGEMENT INFORMATION SYSTEMS                                                  

    The Company's production, distribution, sales and marketing operations are
supported by an IBM AS400-based computer system. The system utilizes licensed   
BPCS manufacturing software which has been tailored to the Company's management 
processes and integrates its production, purchasing, order entry, inventory     
management, distribution and accounting systems. The Company's MIS were recently
upgraded in anticipation of the Company's growth and desire to continue to offer
its customers value-added, efficient services. The Company has invested         
substantial amounts in EDI and ECR to streamline the order, invoicing and       
inventory management functions. The Company believes that its current and       
planned hardware and software upgrades will adequately address any systems      
operations issues relating to the year 2000. See "Risk Factors -- Year 2000     
Compliance."                                                                    

COMPETITION                                                                     

   The Company operates in a highly competitive environment against numerous
well-established national, regional and foreign companies, and many smaller     
companies. The Company's competitors include both independent pasta producers   
and pasta divisions and subsidiaries of large food products companies. The      
Company competes in the procurement of raw materials, the development of new    
products and product lines, the improvement and expansion of previously         
introduced products and product lines and the production, marketing and         
distribution of its products. AIPC's products compete with a broad range of food
products, both                                                                  

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in the retail and institutional customer markets. Competition in these markets  
generally is based on product quality and taste, pricing, packaging and customer
service and logistics capabilities. The Company believes that it currently      
competes favorably with respect to these factors. See "Risk                     
Factors -- Competition" and "Business -- Pasta Industry."                       

  AIPC's direct competitors include large multi-national companies such as
Hershey and Borden and other competitors such as Dakota Growers, Philadelphia   
Macaroni and Zerega's. The Company also competes against foreign companies such 
as Italian pasta producers De Cecco and Barilla and competes, indirectly,       
against food processors such as Kraft Foods, General Mills, Inc., International 
Home Food Products Inc., Campbell Soup Company and Stouffers Corp., that produce
pasta internally as an ingredient for use in their food products. See           
"-- Industry."                                                                  

TRADEMARKS AND PATENTS                                                          

The Company holds a number of federally registered and common law     
trademarks which it considers to be of considerable value and importance to its 
business including: AIPC American Italian Pasta Company, American Italian, and  
Pasta LaBella. The Company has registered the AIPC American Italian Pasta       
Company(R), Pasta LaBella(R), Montalcino(R) and other trademarks with the U.S.  
Patent and Trademark Office. AIPC has filed a registration application with the 
U.S. Patent and Trademark Office for the Calabria(TM) and Heartland(TM)         
trademarks. A patent application is currently pending with respect to the       
proprietary flavoring process for Pasta LaBella flavored pasta.                 

REGULATION                                                                      

The Company is subject to various laws and regulations relating to the
operation of its production facilities, the production, packaging, labeling and 
marketing of its products and pollution control, including air emissions, which 
are administered by federal, state, and other governmental agencies. The        
Company's production facilities are subject to inspection by the U.S. Food and  
Drug Administration and Occupational Safety and Health Administration, the      
Missouri Department of Natural Resources and the South Carolina Department of   
Health and Environmental Control.                                               

EMPLOYEES                                                                       

   As of March 31, 1998, the Company employed 380 full-time persons, of whom
200 were salaried employees and 180 were hourly employees. The Company's        
employees are not represented by any labor unions. AIPC considers its employee  
relations to be good.                                                           

LEGAL PROCEEDINGS                                                               

   The Company currently is not a party to any material litigation nor is it
aware of any litigation threatened against it which, if commenced and adversely 
determined, would likely have a material adverse effect upon the business or    
financial condition of the Company.                                             

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS                                                

   The following table sets forth certain information concerning each of the
directors and executive officers of the Company as of the date of this          
Prospectus:                                                                     

                                                        [Enlarge/Download Table]

                   NAME                    AGE                   POSITION              
                   ----                    ---                   --------              
                                                                                       
Horst W. Schroeder........................ 56   Chairman of the Board of Directors     
Timothy S. Webster........................ 36   President and Chief Executive Officer; 
                                                Director                               
Norman F. Abreo........................... 47   Executive Vice President -- Operations 
David E. Watson........................... 42   Executive Vice President and Chief     
                                                Financial Officer                      
Darrel E. Bailey.......................... 45   Senior Vice President -- Institutional 
                                                Sales                                  
David B. Potter........................... 39   Senior Vice President -- Procurement   
Jerry H. Dear............................. 50   Senior Vice President -- Retail Markets
Jonathan E. Baum.......................... 37   Director                               
David Y. Howe............................. 33   Director                               
Robert H. Niehaus......................... 42   Director                               
John P. O'Brien........................... 56   Director                               
William R. Patterson...................... 56   Director                               
Lawrence B. Sorrel........................ 39   Director                               
Richard C. Thompson....................... 46   Director                               

    Horst W. Schroeder has served as Chairman of the Board of Directors of the
Company since June 1991, and as a Director of the Company since August 1990.    
Since 1990, Mr. Schroeder has been President of HWS & Associates, Inc., a Hilton
Head, South Carolina management consulting firm owned by Mr. Schroeder. Prior to
founding HWS & Associates, Mr. Schroeder served the Kellogg Company, a          
manufacturer and marketer of ready-to-eat and other convenience food products,  
in various capacities for more than 20 years, most recently as President and    
Chief Operating Officer. He is a manager of PSF Holdings, L.L.C. and has served 
as Chairman of the Board of its wholly-owned subsidiary, Premium Standard Farms,
Inc., a vertically-integrated pork producer, since 1996.                        

    Timothy S. Webster has served as President of the Company since June 1991,
as President and Chief Executive Officer of the Company since October 1992, and 
as a Director since June 1989. Mr. Webster joined the Company in April 1989, and
served as Chief Financial Officer from May 1989 to December 1990 and as Chief   
Operating Officer from December 1990 to June 1991. Prior to joining the Company,
Mr. Webster was a manager with the Entrepreneurial Services Group of Arthur     
Young and Company (a predecessor firm to Ernst & Young LLP) from April 1987 to  
April 1989.                                                                     

   Norman F. Abreo joined the Company in December 1991, serving initially as
the Company's Vice President -- Manufacturing. He became Senior Vice            
President -- Operations in June 1995, and Executive Vice President -- Operations
in June 1997. Prior to joining the Company, he was Plant Manager for the Coca-  
Cola Enterprises, Inc. plant in New Orleans, Louisiana, from December 1987 to   
December 1991; Director of Operations for Borden Pasta Group from December 1985 
to December 1987; and Plant Manager of the Borden Pasta Group's New Orleans     
facility from March 1979 to December 1985.                                      

David E. Watson joined the Company in June 1994 as its Senior Vice    
President and Chief Financial Officer. He was promoted to Executive Vice        
President and Chief Financial Officer in June, 1997. Prior to joining AIPC, Mr. 
Watson spent 18 years with the accounting firm of Arthur Andersen LLP, most     
recently as partner-in-charge of its Kansas City and Omaha Business Consulting  
Group practice. Mr. Watson is a certified public accountant.                    

     Darrel E. Bailey has served as Senior Vice President -- Institutional Sales
since 1996. Mr. Bailey joined the Company in May 1993 as Vice President of Sales
and Marketing. He was named Senior Vice President in                            

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1995. Prior to joining the Company, Mr. Bailey was employed by Hallmark Cards,  
Inc. as Marketing Business Manager.                                             

    David B. Potter joined the Company in 1993 as its Director of Procurement.
He was named Vice President in 1994 and Senior Vice President -- Procurement in 
June 1997. Before joining the Company, Mr. Potter had worked in numerous areas  
of Hallmark Cards and its subsidiary, Graphics International Trading Company,   
from 1981 to 1993, most recently as Business Logistics Manager.                 

     Jerry H. Dear was named Senior Vice President -- Retail Markets in February
1998. Mr. Dear joined the Company in 1994 and served as Business Development    
Manager and Senior Business Development Manager until 1995, when he was named   
Vice President of Retail Sales. Prior to joining the Company, Mr. Dear worked   
for Pillsbury as Director of Corporate Sales and Development from 1984 to 1994. 

     Jonathan E. Baum has served as a Director of the Company since 1994. He has
been the Chairman and Chief Executive Officer of George K. Baum & Company, an   
investment banking firm, since 1994. Previously, he had been a Vice President   
with Salomon Brothers Inc.                                                      

   David Y. Howe has served as a Director of the Company since 1995. He is a
Vice President of Citicorp Venture Capital, Ltd., a venture capital firm, where 
he has been employed since 1993. From 1990 to 1993, he had been employed by     
Butler Capital, a private investment company. He is also a director of Aetna    
Industries, Inc., Brake-Pro, Inc., Cable Systems International, Inc.,           
Copes-Vulcan, Inc., Pen-Tab Industries, Inc., Milk Specialties Company and      
Furnishings International, Inc.                                                 

  Robert H. Niehaus has served as a Director of the Company since 1992. He
has been a Managing Director of Morgan Stanley & Co. Incorporated since 1990    
where he has been employed since 1982. He is also Managing Director and a       
Director of The Morgan Stanley Leveraged Equity Fund II, Inc., the general      
partner of MSLEF, and Morgan Stanley Capital Partners III, Inc., the general    
partner of the general partner of the MSCP Funds. He is also a director of      
Allegiance Telecom, Inc., Silgan Holdings Inc., Fort James Corporation,         
Waterford Wedgewood UK, plc, of which he is the Chairman, and Waterford Crystal 
Ltd.                                                                            

     John P. O'Brien has been Managing Director of Inglewood Associates, Inc., a
private investment and consulting firm specializing in turnarounds of           
financially under-performing companies since April 1993. Mr. O'Brien has also   
been Chairman of the Board of two Inglewood Associates, Inc. portfolio          
companies-Jeffery Mining Products, L.P. (a manufacturer and distributor of      
underground mining products) since October 1995 and Allied Construction         
Products, Inc. (a manufacturer and distributor of hydraulic and pneumatic       
demolition, compaction, boring and trench shoring devices) since 1993. Prior to 
joining Inglewood, he was the Southeast Regional Managing Partner for Price     
Waterhouse and a member of the firm's Policy Board and Management Committee from
July 1984 to April 1990. Mr. O'Brien is also a director of Premix, Inc.         

   William R. Patterson is currently Vice President of PSF Holdings, L.L.C.,
and the Executive Vice President, Chief Financial Officer and Treasurer of its  
wholly-owned subsidiary, Premium Standard Farms, Inc. ("PSF, Inc."), a          
fully-integrated pork producer and processor. From January to October 1996, Mr. 
Patterson was a principal of Patterson Consulting LLC and served as the Acting  
Chief Financial Officer of the predecessor company of PSF, Inc. Prior to joining
the predecessor to PSF, Inc. in 1996, Mr. Patterson was a partner in Arthur     
Andersen LLP from 1976 through 1995. He is also a director of the Paul Mueller  
Company.                                                                        

   Lawrence B. Sorrel has served as a Director of the Company since 1992. He
is a Managing Director of Morgan Stanley & Co. Incorporated where he has been   
employed since 1986. He is also Managing Director and a Director of Morgan      
Stanley Capital Partners III, Inc., the general partner of the general partner  
of the MSCP Funds, and The Morgan Stanley Leveraged Equity Fund II, Inc., the   
general partner of MSLEF. He is also a director of Renaissance Media Group,     
Emmis Broadcasting Corporation, Vanguard Health Systems, Inc., LifeTrust        
America, Inc., and The Compucare Company.                                       

     Richard C. Thompson has served as a Director of the Company since 1986. Mr.
Thompson is an experienced entrepreneur and, since 1993, has been President and 
Chief Executive Officer of Thompson's Pet                                       

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Pasta Products, Inc., a pet food producer. He is the founder of the Company and 
served as its President from May 1986 to June 1991.                             

COMPOSITION OF BOARD OF DIRECTORS                                               

   The Company's Board of Directors consists of nine directors, divided into
three classes, with the members of each class serving staggered three-year      
terms. The current term of the first class expires at the annual meeting of     
stockholders to be held in 2001, the current term of the second class expires in
1999 and the current term of the third class expires in 2000. Messrs. Howe,     
O'Brien and Patterson are included in the first class, Messrs. Baum, Niehaus and
Thompson are included in the second class and Messrs. Webster, Schroeder and    
Sorrel are included in the third class. Directors hold office for a term of     
three years and serve until their successors are elected and qualified. Officers
are elected annually by the Board of Directors and serve until their successors 
are duly elected and qualified.                                                 

COMPENSATION OF DIRECTORS                                                       

   Effective January 1, 1998, all directors who are not employees of AIPC or
employees of significant stockholders ("Outside Directors") will be paid an     
annual retainer of $15,000, payable in shares of the Company's Class A Common   
Stock immediately following AIPC's annual meeting of stockholders, and paid     
$1,500 in cash for each meeting of the Board of Directors attended.             
Additionally, Outside Directors who are members of a committee of the Board of  
Directors will be paid $500 in cash for each committee meeting attended. An     
Outside Director who is a chairman of such a committee will also be paid an     
annual cash retainer of $2,500. None of the other directors of the Company is   
paid directors' fees for serving on the Board of Directors or its committees.   
All directors are reimbursed for out-of-pocket expenses incurred in connection  
with attendance at meetings of the Board of Directors and meeting of Board      
committees. On February 25, 1998, the Company issued 544 shares of Class A      
Common Stock to each of Messrs. O'Brien, Patterson and Thompson.                

COMMITTEES OF THE BOARD                                                         

  Under the Company's By-laws, the Board of Directors may establish one or
more committees, appoint one or more members of the Board of Directors to serve 
on each committee, fix the exact number of committee members, fill vacancies,   
change the composition of the committee, impose or change the duties of the     
committee and terminate the committee. The Board of Directors has established an
Audit Committee and a Compensation Committee. Each such committee has two or    
more members who serve at the pleasure of the Board of Directors.               

The Compensation Committee is responsible for reviewing and making    
recommendations to the Board of Directors with respect to the salaries, bonuses,
and other compensation paid to key employees and officers of the Company,       
including the terms and conditions of their employment, and administers all     
stock option and other benefit plans (except with respect to participation by   
executive officers in stock option and other equity incentive plans of the      
Company which will be made by the Board of Directors or a committee comprised   
solely of outside directors, unless otherwise specified in the applicable plan  
documents) affecting key employees' and officers' direct and indirect           
remuneration. Currently, Messrs. Niehaus, O'Brien, Schroeder and Sorrel serve on
the Compensation Committee.                                                     

  The Audit Committee is responsible for reviewing the Company's financial
statements, audit reports, internal financial controls and the services         
performed by the Company's independent public accountants, and for making       
recommendations with respect to those matters to the Board of Directors. Messrs.
Baum, Patterson and Thompson serve on the Audit Committee.                      

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EXECUTIVE COMPENSATION                                                          

     The following table summarizes compensation information with respect to the
President and Chief Executive Officer ("CEO") of the Company and each of the    
Company's most highly-compensated executive officers for services rendered      
during the fiscal year ended September 30, 1997 (collectively, with the CEO, the
"Named Executive Officers"):                                                    

SUMMARY COMPENSATION TABLE

                                                        [Enlarge/Download Table]

                                                                            LONG-TERM                    
                                                   FISCAL PERIOD          COMPENSATION                   
                                                    COMPENSATION             AWARDS                      
                                                --------------------  ---------------------              
                                      FISCAL                               SECURITIES         ALL OTHER  
    NAME AND PRINCIPAL POSITION      PERIOD(1)  SALARY($)   BONUS($)  UNDERLYING OPTIONS(#)  COMPENSATION
    ---------------------------      ---------  ---------   --------  ---------------------  ------------
                                                                                                         
Timothy S. Webster.................    1997     $282,596    $250,000         84,622          $  7,151(2) 
  President and                                                                                          
  Chief Executive Officer                                                                                
Horst W. Schroeder.................    1997      183,700     180,000         84,622                   -- 
  Chairman of the Board                                                                                  
David E. Watson....................    1997      159,931      90,000             --             5,244(3) 
  Executive Vice President and                                                                           
  Chief Financial Officer                                                                                
Norman F. Abreo....................    1997      137,423      80,000             --             3,223(3) 
  Executive Vice                                                                                         
  President--Operations                                                                                  
Darrel E. Bailey...................    1997      147,249      30,000         15,330             4,208(3) 
  Senior Vice President--                                                                                
  Institutional Sales and Marketing                                                                      

---------------                                                                 

(1) For purposes of the foregoing table, the Company's 1997 fiscal year extended
from October 1, 1996 to September 30, 1997.                             

(2) Includes payments under the American Italian Pasta Company Retirement       
Savings Plan and premiums in the amount of $518 paid by the Company on a
split-dollar life insurance policy.                                     

(3) Represents payments under the American Italian Pasta Company Retirement     
Savings Plan.                                                           

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  The following table sets forth certain information with respect to stock
options granted to each of the Named Executive Officers during the fiscal year  
ended September 30, 1997:                                                       

OPTION GRANTS IN LAST FISCAL YEAR 

                                                        [Enlarge/Download Table]

                                           INDIVIDUAL GRANTS                                                 
                                  -----------------------------------              POTENTIAL REALIZABLE VALUE
                                               % OF TOTAL                           AT ASSUMED ANNUAL RATES  
                                                OPTIONS                                  OF STOCK PRICE      
                                    SHARES     GRANTED TO                           APPRECIATION FOR OPTION  
                                  UNDERLYING   EMPLOYEES    EXERCISE                        TERM(1)          
                                   OPTIONS     IN FISCAL      PRICE    EXPIRATION  --------------------------
              NAME                 GRANTED        1997      PER SHARE     DATE         5%             10%    
              ----                ----------   ----------   ---------  ----------  -----------    -----------
                                                                                                             
Timothy S. Webster...............   84,622        32.9%      $ 7.02      4/15/07    $373,593       $946,757  
Horst W. Schroeder...............   84,622        32.9         7.02      4/15/07     373,593        946,757  
David E. Watson..................       --          --           --           --          --             --  
Norman F. Abreo..................       --          --           --           --          --             --  
Darrel E. Bailey.................       --          --           --           --          --             --  

---------------                                                                 

(1) The amounts shown as potential realizable values are based on assumed       
 annualized rates of appreciation in the price of the Common Stock of five
 percent and ten percent over the term of the options, as set forth in the
 rules of the Securities and Exchange Commission. Actual gains, if any, on
stock option exercises are dependent upon the future performance of the 
    Common Stock. There can be no assurance that the potential realizable values
reflected in this table will be achieved.                               

The following table sets forth certain information with respect to the
aggregate exercises during fiscal 1997 by the Named Executive Officers and the  
number and value of options held by such officers as of September 30, 1997:     

AGGREGATED OPTION EXERCISES 
IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES

                                                        [Enlarge/Download Table]

                                                                       AT SEPTEMBER 30, 1997                  
                                                     ---------------------------------------------------------
                                                              NUMBER OF               VALUE OF UNEXERCISED    
                                                         UNEXERCISED OPTIONS         IN-THE-MONEY OPTIONS(1)  
                         SHARES ACQUIRED    VALUE    ---------------------------   ---------------------------
          NAME           UPON EXERCISE(#)  REALIZED  EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
          ----           ----------------  --------  -----------   -------------   -----------   -------------
                                                                                                              
Timothy S. Webster......       --            --        263,169        136,953      $3,352,903     $1,282,729  
Horst W. Schroeder......       --            --        263,169        136,953       3,352,903      1,282,729  
David E. Watson.........       --            --         44,899         44,752         457,267        390,339  
Norman F. Abreo.........       --            --         53,937         35,713         575,492        272,114  
Darrel E. Bailey........       --            --         27,116         18,077         133,411         88,939  

---------------                                                                 

(1) Based on the initial public offering price of the Class A Common Stock of   
$18 per share on October 9, 1997.                                       

EMPLOYMENT AGREEMENTS                                                           

Mr. Webster. Mr. Webster entered into an employment agreement with the
Company effective October 15, 1997 and terminating September 30, 2002. Under the
agreement, Mr. Webster is entitled to an annual base salary of $330,000, subject
to annual adjustment by the Board. Mr. Webster is also eligible to receive      
annual bonuses at the discretion of the Board under the Company's 1996 Salaried 
Bonus Plan (the "Bonus Plan"). In connection with the Company's initial public  
offering, Mr. Webster was granted options to purchase 398,583 shares of Class A 
Common Stock at the initial public offering price of $18 per share. If Mr.      
Webster's employment is terminated without cause, due to his disability or if he
resigns for good reason, he is to receive payments equal to two times his       
then-current base salary and bonus. Mr. Webster has agreed not to compete with  
the Company for two years after termination of employment, subject to the       
receipt by Mr. Webster of certain severance payments, in some cases at the      
election of the Company. All stock options awarded to Mr. Webster will vest (i) 
immediately upon a termination of his employment without cause or his           

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resignation for good reason; (ii) if the employment agreement expires and the   
Company does not offer Mr. Webster a new agreement on terms no less favorable   
than those in the current agreement; or (iii) upon a change of control (as      
defined in the agreement). The Company has agreed to nominate Mr. Webster for   
election to its Board of Directors in accordance with the terms of the          
Stockholders Agreement.                                                         

 Mr. Schroeder. In connection with the Company's initial public offering
effective October 15, 1997, Mr. Schroeder entered into an employment agreement  
with the Company terminating October 15, 2000. Under the agreement, Mr.         
Schroeder serves as Chairman of the Board and is entitled to receive base       
compensation of $4,000 per day of service to the Company, subject to a minimum  
payment of $120,000 per year. Pursuant to a prior agreement, the Company paid to
Mr. Schroeder a signing bonus of $330,000 on January 1, 1996. In the event Mr.  
Schroeder does not render services to the Company through December 31, 1998     
because he voluntarily terminates, refuses to provide services under his current
agreement, or is terminated for cause, Mr. Schroeder is required to repay the   
portion of the signing bonus which relates to the period of the original term   
for which he does not render services. Mr. Schroeder is also eligible to        
participate in the Company's Bonus Plan. If Mr. Schroeder terminates his        
agreement for good reason, including a "change of control" as defined in the    
Shareholders Agreement, dated October 30, 1992 by and among the Company and its 
shareholders, he is entitled to receive payment of all unpaid amounts due for   
service rendered, as well as an additional amount equal to the unpaid balance   
due for the remainder of the term of the agreement and an additional payment    
equal to $2,000 multiplied by the number of days of service remaining under the 
term, which in no event shall be more than 30 days during any calendar year. In 
addition, upon termination by Mr. Schroeder of his employment for good reason,  
the unvested portion of Mr. Schroeder's options under the Company's stock option
plans will become immediately vested. Mr. Schroeder was also granted options to 
purchase 275,942 shares of the Company's Class A Common Stock, at the initial   
public offering price. Mr. Schroeder has agreed not to compete with the Company 
for a period of two years after termination of his employment.                  

Messrs. Watson and Abreo. Messrs. Watson and Abreo have entered into  
employment agreements with the Company effective October 15, 1997 and           
terminating October 15, 2000. Such agreements are renewable automatically for   
successive one-year terms, unless the Company gives the employee at least six   
months' prior written notice of non-renewal. The agreements entitle Messrs.     
Watson and Abreo to annual base salaries of $180,000 and $160,000, respectively 
(subject to annual merit increase reviews by the Board of Directors), and annual
bonuses at the discretion of the Board of Directors in accordance with the terms
of the Bonus Plan. Effective October 8, 1997, Messrs. Watson and Abreo each     
received options to purchase 61,320 shares, respectively, of Class A Common     
Stock at $18 per share. In the event of termination of employment without cause 
or resignation for good reason, or in the event their employment is terminated  
by the Company without cause within six months after a change in control,       
Messrs. Watson and Abreo are each entitled to the greater of (i) one-year's     
annual base salary and bonus or (ii) annual base salary and bonus for the       
remainder of the initial employment term under their respective employment      
agreements. The employment agreements also contain one-year covenants not to    
compete after any termination of employment. All stock options awarded to each  
of Messrs. Watson and Abreo will vest immediately upon (i) resignation for good 
reason or (ii) a change in control of the Company.                              

1996 SALARIED BONUS PLAN                                                        

    The Company maintains the Bonus Plan for certain salaried employees of the
Company, including the Named Executive Officers. The Bonus Plan permits these   
employees to earn cash performance bonus awards of up to a percentage of their  
respective salaries as determined by the Board of Directors, or by management on
the Board's behalf. The amount of any bonus is based upon the Company's         
performance and the individual performance of such participant. See             
"Management -- Executive Compensation."                                         

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STOCK OPTION PLANS                                                              

1992 Non-Statutory Stock Option Plan                                  

On October 29, 1992, the Company's Board of Directors and stockholders
adopted the American Italian Pasta Company Non-Statutory Stock Option Plan (the 
"1992 Plan"). The purpose of the 1992 Plan is to secure for the Company and its 
stockholders the benefits of the incentive inherent in stock ownership by       
officers and other key employees of the Company.                                

     The 1992 Plan is administered by the Compensation Committee of the Board of
Directors. The Compensation Committee has the power and sole discretion to      
determine the persons to whom options are granted and the number of shares      
covered by those options, subject in each case to the limitations set forth in  
the 1992 Plan. Options may be granted under the 1992 Plan only to officers and  
key employees of the Company. The period during which an option may be exercised
(not to exceed 13 years), and the time at which it becomes exercisable, is fixed
by the Compensation Committee at the time the option is granted. Options granted
under the 1992 Plan are not transferable by the holder other than by will or the
laws of descent and distribution.                                               

The number of shares which may be issued and sold pursuant to options 
granted under the 1992 Plan may not exceed 1,201,880 shares (subject to         
adjustment for stock dividends, stock splits, combinations or reclassifications 
of shares, or similar transactions). No consideration is paid to the Company by 
any optionee in exchange for the grant of an option. The per share exercise     
price for an option granted under the 1992 Plan is determined by the            
Compensation Committee.                                                         

    Certain provisions of the 1992 Plan may have the effect of discouraging or
delaying possible takeover bids. In the event of a "Change of Control," all of  
the outstanding options automatically become immediately exercisable in full. A 
"Change of Control" is generally defined to take place when disclosure of such a
change would be required by the proxy rules promulgated by the Securities and   
Exchange Commission or when (i) certain persons acquire beneficial ownership of 
25% or more of the combined voting power of the Company's voting securities,    
(ii) less than a majority of the directors are persons who were either nominated
or selected by the Board of Directors, (iii) a merger involving the Company in  
which the Company's stockholders own less than 80% of the voting stock of the   
surviving corporation; or (iv) a liquidation of the Company or sale of          
substantially all the assets of the Company occurs. In the event that the       
Company is not the surviving corporation of any merger, consolidation,          
reorganization or acquisition by another corporation, outstanding options under 
the 1992 Plan may be assumed, or replaced with new options of comparable value, 
by the surviving corporation. If the surviving corporation does not assume or   
replace outstanding options, or in the event the Company is liquidated or       
dissolved, then subject to certain limitations, each holder of outstanding      
options may exercise all or part of such options (even if the options would not 
otherwise have been exercisable in full) during the period beginning 30 days    
before the event triggering the acceleration, and ending on the day before such 
event.                                                                          

  Generally, the exercise price of an option is at least equal to the fair
market value of the Common Stock on the date of grant. As of the date of this   
Prospectus, options to purchase 932,013 shares of Common Stock at exercise      
prices ranging from $2.33 to $12.23 per share (with a weighted average exercise 
price of $7.57 per share) were issued and outstanding under the 1992 Plan. The  
outstanding options under the 1992 Plan expire at dates ranging from October    
2002 to April 2007. None of the executive officers of the Company have exercised
any options prior to the date of this Prospectus.                               

1993 Non-Qualified Stock Option Plan                                  

 The American Italian Pasta Company 1993 Non-Qualified Stock Option Plan
(the "1993 Plan") was adopted by the Board of Directors and approved by the     
stockholders of the Company effective December 8, 1993. The 1993 Plan was       
adopted to compensate and provide incentives for mid-level managers of the      
Company.                                                                        

The 1993 Plan is also administered by the Compensation Committee. The 
Compensation Committee has full and final authority in its discretion, subject  
to the provisions of the 1993 Plan and applicable law, to                       
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determine the individuals to whom and the time or times at which options shall  
be granted and the number of shares of Common Stock covered by each option.     
Options may be granted under the 1993 Plan to mid-level management. The period  
during which an option may be exercised (not to exceed ten years), and the time 
at which it becomes exercisable is fixed by the Compensation Committee at the   
time the option is granted. Options granted under the 1993 Plan are not         
transferrable by the holder other than by will or the laws of dissent and       
distribution.                                                                   

The number of shares which may be issued and sold pursuant to options 
granted under the 1993 Plan may not exceed 82,783 shares (subject to adjustment 
for stock dividends, stock splits, combinations or reclassifications of shares  
or similar transactions). No consideration is paid to the Company by any        
optionee in exchange for the grant of an option. The per share exercise price   
for an option granted under the 1993 Plan is determined by the Compensation     
Committee.                                                                      

In the event of any merger, recapitalization, consolidation, split-up,
spin-off, repurchase, distribution or similar transaction effecting the Common  
Stock, the Compensation Committee may take such action in its sole discretion   
that it deems appropriate. The Compensation Committee may authorize the issuance
or assumption of options or similar rights in connection with any such          
transaction whether or not the Company is a surviving or continuing corporation,
and upon such terms and conditions as it may deem appropriate.                  

 The exercise price of an option is generally at least equal to the fair
market value of the Common Stock on the date of grant. As of the date of this   
Prospectus, options to purchase 40,012 shares of Common Stock at exercise prices
ranging from $4.92 to $12.23 per share (with a weighted average exercise price  
of $10.68 per share) were issued and outstanding under the 1993 Plan. The       
outstanding options under the 1993 Plan expire at dates ranging from December   
2003 to December 2006.                                                          

1997 Equity Incentive Plan                                            

The Company has adopted the American Italian Pasta Company 1997 Equity
Incentive Plan (the "Equity Incentive Plan" or "1997 Plan") effective October 7,
1997. Under the 1997 Plan, the Board or a committee designated by the Board (the
Board or committee, as the case may be, the "Committee") is authorized to grant 
nonqualified stock options, incentive stock options, reload options, stock      
appreciation rights ("SARs"), shares of restricted Common Stock ("restricted    
shares"), performance shares, performance units and shares of Common Stock      
awarded as a bonus ("bonus shares") (all of the foregoing collectively,         
"Awards"). There are 2,000,000 shares of Common Stock reserved for issuance     
under the Equity Incentive Plan. In connection with the Company's initial public
offering, the Board of Directors granted options to purchase an aggregate of    
993,391 shares of Class A Common Stock at an exercise price of $18 per share.   
The stock options expire 10 years from the date of grant, unless terminated     
earlier in accordance with the terms of the 1997 Plan, and become exercisable   
over the next five years in varying amounts depending on the terms of the       
individual option agreements. As of the date of this Prospectus, options to     
purchase 1,004,377 shares of Common Stock at exercise prices ranging from $18.00
to $27.56 per share (with a weighted average exercise price of $18.32 per share)
were issued and outstanding under the 1997 Plan.                                

    Eligibility and Conditions of Grants.  All employees (including officers),
directors and consultants of the Company or any subsidiary are eligible to      
receive Awards at the discretion of the Committee. The Committee is authorized, 
subject to certain limits specified in the Equity Incentive Plan, to determine  
to whom and on what terms and conditions Awards shall be made including, but not
limited to, the vesting and term of options.                                    

Stock Options.  The option exercise price must be determined by the   
Committee at the time of grant and set forth in the award agreement, but such   
exercise price must be at least 100% of the fair market value of a share of     
Common Stock on the date of grant. (In the case of options to be granted in     
connection with the Offering, such fair market value will equal the price at    
which the Class A Common Stock is offered to the public.) The option exercise   
price may be paid by any one or more of the following in the discretion of the  
Committee: (i) cash, (ii) check, (iii) wire transfer, (iv) shares of Common     
Stock that have been held for at least 6 months or that were purchased on the   
open market, or (v) a "cashless" exercise pursuant to a sale through a broker of
all or a portion of the shares. The Committee also has discretion to have the   
Company                                                                         
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make or guarantee loans to the grantees for the exercise price. The Committee   
will determine the term and vesting schedule for options at the time of grant.  
Options can be granted as either nonstatutory options (pursuant to which        
grantees would receive taxable income, and the Company would receive a          
compensation expense deduction, when options are exercised) or as incentive     
stock options (ISOs) (which, subject to certain conditions, would offer more    
favorable tax consequences to grantees, but not the Company).                   

  Stock Appreciation Rights.  Upon exercise of a stock appreciation right,
the grantee shall receive a payment equal to the appreciation in value of the   
Common Stock between the grant date and the exercise date. The benefit will be  
payable in cash or Common Stock.                                                

Restricted Shares.  Restricted shares will be forfeited unless the    
conditions set by the Committee at the time of grant are satisfied or are       
waived. The Committee will determine whether or not a grantee shall be required 
to pay for such restricted shares and, if so, what such price shall be.         

   Performance Shares/Performance Units.  To the extent that the performance
goals specified by the Committee in a grant of performance shares or performance
units have been achieved, then a benefit shall be paid after the end of the     
performance-measuring period specified by the Committee. The amount of the      
benefit of performance shares is based on the percentage attainment of the      
performance goals multiplied by the value of a share of Common Stock at the end 
of the performance period. The value of performance units is based on the       
achievement of performance goals multiplied by the unit value stabilized by the 
Committee at the time of grant. No benefit is payable on either performance     
shares or performance units if the minimum performance goals have not been met. 
The benefit will be payable in cash or Common Stock.                            

Bonus Shares.  Bonus shares can be granted without cost and without   
restriction in amounts and subject to such terms and conditions as the Committee
may in its discretion determine.                                                

     Other.  Options and stock appreciation rights may have a maximum term of 10
years. The effect of a change of control, the termination of a grantee's        
employment or the death or permanent disability of a grantee will be determined 
by the Committee at the time of grant and be set forth in the award agreement.  
Both Awards and Shares acquired pursuant to the exercise or vesting of Awards   
are subject to transfer restrictions as set forth in the 1997 Plan. The Plan may
be amended by the Board without: (i) stockholder approval except in the event of
an increase in the number of shares available for Awards; (ii) the consent of   
the Award holder unless such amendment would adversely affect such holder; or   
(iii) as otherwise may be required under stock exchange listing requirements or 
any other regulatory or legal requirement. The Equity Incentive Plan will       
terminate when shares available for grant under the plan have been exhausted,   
except in no event will incentive stock options be granted on or after the 10th 
anniversary of the earlier of (i) the date the Equity Incentive Plan was        
adopted; and (ii) the date the Equity Incentive Plan was approved by the        
Stockholders of the Company. Shares acquired pursuant to the 1997 Plan by       
persons who are parties to the Stockholders Agreement will be subject to certain
restrictions under the Stockholders Agreement. In addition, the Compensation    
Committee may, in its discretion, condition the grant of any Award under the    
1997 Plan on the consent of the recipient of such Award to become bound by the  
Stockholders Agreement.                                                         

401(K) PROFIT SHARING PLAN                                                      

   The Company adopted the American Italian Pasta Company Retirement Savings
Plan (the "401(k) Plan") effective January 1, 1992. In general, employees of the
Company who have completed one year of service (as defined in the 401(k) Plan)  
are eligible to participate in the 401(k) Plan. Participants may make           
contributions to the 401(k) Plan by voluntarily reducing their salary from the  
Company up to a maximum of 12% of total compensation or $9,500 (or such higher  
amount as is prescribed by the Secretary of the Treasury for cost of living     
adjustments), whichever is less, and the Company matches such contributions to  
the extent of 50% of the first 6% of a participant's salary reduction. The      
Company's matching contributions vest 25% per year and are 100% vested after 4  
years of service. In addition to matching contributions, the Company may        
contribute additional amounts determined by it in its sole discretion which are 
allocated to a participant's account in the proportion that such participant's  
compensation bears to the total compensation of all participants for the plan   
year. These additional contributions vest in the same manner as the matching    

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contributions. Subject to certain conditions and limitations, participants of   
the 401(k) Plan may elect to invest up to 50% of their matching contribution    
accounts into shares of Common Stock of the Company.                            

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION                     

 All compensation decisions during the fiscal period ended September 30,
1997 for each of the Named Executive Officers were made by the Compensation     
Committee of the Board of Directors. Mr. Schroeder, Chairman of the Board, is a 
member of the Compensation Committee. See "Certain Relationships and Related    
Transactions." Decisions with respect to the base salary and cash bonuses paid  
to executive officers are made by the Compensation Committee and decisions with 
respect to the participation of executive officers in stock option and other    
equity incentive plans of the Company are made by the Board of Directors or a   
committee comprised solely of outside directors.                                

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

STOCKHOLDERS AGREEMENT                                                          

     Effective upon completion of this Offering, the Company, the Morgan Stanley
Stockholders, Citicorp Venture Capital, Ltd. and CCT Partners III, L.P.         
(collectively "Citicorp"), affiliated entities of George K. Baum & Company      
("GKB"), and Messrs. Schroeder, Thompson, Webster, Watson, Abreo and Bailey and 
certain other existing stockholders of the Company (collectively, the "Existing 
Stockholders") amended their existing Stockholders Agreement, which sets forth  
certain rights and obligations of such Existing Stockholders. The amended       
Stockholders Agreement grants the Morgan Stanley Stockholders and Citicorp      
certain demand registration rights and contains customary terms and provisions  
with respect to, among other things, registration procedures and certain rights 
to indemnification granted by the parties thereunder in connection with any such
registration. Pursuant to the Stockholders Agreement, the Morgan Stanley        
Stockholders have the right to designate one director nominee so long as the    
Morgan Stanley Stockholders own any shares of the outstanding Common Stock of   
the Company. The Existing Stockholders will agree to vote all of their shares of
Class A Common Stock in favor of the director nominee designated pursuant to the
Stockholders Agreement. At least two members of the Board of Directors will be  
independent directors. Additionally, certain members of the Company's senior    
management, including Messrs. Schroeder, Webster, Watson, Abreo, Potter, Dear   
and Bailey have agreed to certain restrictions and limitations on the ability to
sell or transfer shares of Common Stock as provided in the Stockholder          
Agreement.                                                                      

1997 PRIVATE EQUITY FINANCING                                                   

     In April 1997, the Company sold an aggregate of 3,174,528 shares of Class A
Common Stock to current stockholders of the Company for an aggregate purchase   
price of $22,291,947, or $7.02 per share, determined by an independent valuation
firm to be fair value for the shares. The MSCP Funds purchased a total of       
2,563,323 shares for $18,000,000. Affiliated entities of GKB purchased 427,219  
shares for $2,999,861. Mr. Schroeder, a Director of the Company, purchased      
49,056 shares for $344,480. In addition, a group of executive officers of the   
Company contributed an aggregate of $729,996 to the Company for 103,957 shares, 
including $142,159 by Mr. Webster, $298,535 by Mr. Watson, $36,472 by Mr. Abreo,
$136,375 by Mr. Bailey, $91,472 by Mr. Potter and $7,500 by Mr. Dear. In        
connection with these sales and purchases, the Company loaned an aggregate of   
$297,513 to these executive officers to finance their stock purchases, including
$112,159 to Mr. Webster, $48,535 to Mr. Watson, $36,472 to Mr. Abreo, $36,375 to
Mr. Bailey $21,472 to Mr. Potter and $7,500 to Mr. Dear. Each of these loans are
evidenced by a promissory note made payable to the Company and secured by shares
of Class A Common Stock. Such loans are to be repaid over a period of three     
years commencing upon termination of the transfer restrictions applicable to    
such shares under the Stockholders Agreement. Such loans bear interest at the   
then applicable federal rate.                                                   

FINANCIAL ADVISORY SERVICES                                                     

    Messrs. Niehaus and Sorrel, both Directors of the Company, are employed by
Morgan Stanley & Co. Incorporated. Prior to October 1997, Morgan Stanley Senior 
Funding, Inc., an affiliate of Morgan Stanley & Co. Incorporated, one of the    
U.S. Underwriters, served as the documentation agent under the agreements       
relating to the Company's Credit Facility, and acted as an arranger for the     
Credit Facility for which it received a fee in the amount of $311,875. Morgan   
Stanley & Co. Incorporated also served as one of the U.S. and International     
Underwriters in connection with the Company's initial public offering in October
1997 for which it received customary underwriting fees.                         

Since 1994, the Company has paid fees to George K. Baum & Company's   
Investment Banking Division for investment banking and financial advisory       
services and has paid George K. Baum & Company Professional Investment Advisors 
Division fees for investment advice provided with respect to the 401(k) Plan.   
Jonathan E. Baum, a Director of the Company, owns all voting shares of George K.
Baum Holdings, Inc., which owns 100% of George K. Baum & Company, one of the    
U.S. and International Underwriters. George K. Baum & Company also served as one
of the U.S. and International Underwriters in connection with the Company's     
initial public offering in October 1997 for which it received customary         
underwriting fees.                                                              

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MANAGEMENT INDEBTEDNESS                                                         

    In April 1995 and April 1997, the Company loaned funds to Messrs. Webster,
Watson, Abreo, Bailey, Potter and Dear, to purchase shares of Class A Common    
Stock at prices ranging between $4.92 and $7.02 per share, respectively. Each   
loan was evidenced by a promissory note bearing interest at the then applicable 
federal rate and payable in equal installments over three years commencing upon 
termination of the transfer restrictions applicable to such shares under the    
Stockholders Agreement. The table below sets forth the aggregate number of      
shares purchased with funds loaned by the Company, the original aggregate loan  
amounts, and the aggregate loan balances as of March 31, 1998.                  

                                                        [Enlarge/Download Table]

                                                         NUMBER OF  ORIGINAL LOAN    BALANCE AT  
                   EXECUTIVE OFFICER                      SHARES       BALANCE     MARCH 31, 1998
                   -----------------                     ---------  -------------  --------------
                                                                                                 
Timothy S. Webster......................................  21,339      $138,559        $120,959   
David E. Watson.........................................  14,269        84,735          60,601   
Norman F. Abreo.........................................   7,217        46,422          39,788   
Darrel E. Bailey........................................   8,738        53,875              --   
David B. Potter.........................................   5,083        31,422          21,472   
Jerry H. Dear...........................................   1,068         7,500           7,500   

CONSULTING AGREEMENT WITH HWS & ASSOCIATES, INC.                                

Pursuant to a consulting agreement between the Company and HWS &      
Associates, Inc. ("HWS"), a management consulting firm of which Mr. Schroeder,  
Chairman of the Board of Directors, is the sole owner, the Company paid to HWS  
$133,359 during fiscal 1995 for management consulting services performed and    
travel expenses incurred on behalf of the Company. The consulting arrangement   
terminated January 1, 1996 upon Mr. Schroeder's execution of his employment     
agreement with the Company.                                                     

   The Company's policy is that all transactions between the Company and its
executive officers, directors and principal stockholders be on terms no less    
favorable than could be obtained from unaffiliated third parties or are subject 
to the approval of the Company's disinterested directors.                       

PRODUCT SALES                                                                   

 The Company sells milling by-products to Thompson's Pet Pasta Products,
Inc., of which Richard C. Thompson, a director of the Company, is the President 
and Chief Executive Officer. Such sales were $357,000 and $648,014 for the      
nine-month fiscal period ended September 30, 1996 and the fiscal year ended     
September 30, 1997, respectively. Such sales were on substantially the same     
terms as the Company sells such products to unaffiliated third parties.         

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PRINCIPAL AND SELLING STOCKHOLDERS

 The following table sets forth certain information regarding beneficial
ownership of the Company's Class A Common Stock as of the date of this          
Prospectus, before and after giving effect to the sale of the shares of Class A 
Common Stock offered hereby, by (i) each person who is known by the Company to  
own beneficially more than 5% of the outstanding shares of Common Stock, (ii)   
the Selling Stockholders, (iii) each director of the Company, (iv) each of the  
Named Executive Officers and (v) all directors and executive officers of the    
Company as a group.                                                             

                                                                [Download Table]

                           SHARES BENEFICIALLY                 SHARES BENEFICIALLY  
                               OWNED PRIOR                         OWNED AFTER      
                             TO THE OFFERING                       THE OFFERING     
                          ----------------------              ----------------------
                                 CLASS A           CLASS A           CLASS A        
                             COMMON STOCK(1)        SHARES      COMMON STOCK(1)(2)  
                          ----------------------    BEING     ----------------------
NAME OF BENEFICIAL OWNER   NUMBER     PERCENT(3)  OFFERED(2)   NUMBER     PERCENT(4)
------------------------   ------     ----------  ----------   ------     ----------
                                                                                    
The Morgan Stanley                                                                  
  Leveraged Equity Fund                                                             
  II, L.P.(5).........    3,830,281      22.8%    2,842,157     988,124       5.5%  
  1221 Avenue of the                                                                
  Americas                                                                          
  New York, NY 10020                                                                
Morgan Stanley Capital                                                              
  Partners III,                                                                     
  L.P.(5).............    1,626,068       9.7     1,206,581     419,487       2.3   
  1221 Avenue of the                                                                
  Americas                                                                          
  New York, NY 10020                                                                
Citicorp Venture                                                                    
  Capital, Ltd.(6)....    1,047,298       6.2            --   1,047,298       5.8   
  399 Park Avenue                                                                   
  New York, NY 10043                                                                
Richard C. Thompson                                                                 
  (7).................      380,753       2.3       150,000     230,753       1.3   
  16 Kansas Avenue                                                                  
  Kansas City, KS 66105                                                             
Horst W.                                                                            
  Schroeder(8)(9).....      456,169       2.7        90,631     365,538       2.0   
Jonathan E. Baum(10)...     376,859       2.3            --     376,859       2.1   
David Y. Howe.........           --        --            --          --        --   
Robert H. Niehaus.....           --        --            --          --        --   
John P. O'Brien.......        1,544         *            --       1,544         *   
William R. Patterson...         544         *            --         544         *   
Lawrence B. Sorrel....           --        --            --          --        --   
Timothy S.                                                                          
  Webster(9)(11)......      354,837       2.1        90,631     264,206       1.5   
David E. Watson(9)....       94,771         *            --      94,771         *   
Norman F. Abreo(9)....       70,193         *        20,000      50,193         *   
Darrel E. Bailey(9)...       59,131         *            --      59,131         *   
All directors and                                                                   
  executive officers as                                                             
  a                                                                                 
  group (12                                                                         
  persons)(9).........    1,794,801      10.2       351,262   1,443,539       7.8   

---------------                                                                 

*   Less than 1%.                                                             

(1) Beneficial ownership is determined in accordance with the rules of the    
Commission. In computing the number of shares beneficially owned by a 
    person and the percentage ownership of that person, shares of Common Stock
subject to options and warrants held by that person that are currently
   exercisable or will become exercisable within 60 days of the date of this
 Prospectus are deemed outstanding. Such shares, however, are not deemed
   outstanding for the purposes of computing the percentage ownership of any
    other person. Except as otherwise indicated in a footnote to this table or
     as to be provided in the Stockholders Agreement (see "Certain Relationships
   and Related Transactions -- Stockholders Agreement"), the persons in this
   table have sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them.                     

(2) Certain Selling Stockholders have granted an option to the U.S.           
     Underwriters to purchase up to an aggregate of 810,000 additional Shares of
     Class A Common Stock to cover over-allotments, if any. Such shares will not
  be sold unless the U.S. Underwriters exercise the over-allotment option,
 and the above table assumes that such over-allotment option will not be
exercised.                                                            

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(3) Based upon 16,777,418 shares of Class A Common Stock outstanding, plus    
    shares of Class A Common Stock issuable upon exercise of options, warrants
and convertible securities which are included in the number of shares 
beneficially owned by such person.                                    

 (4) Based upon 17,978,680 shares of Class A Common Stock to be outstanding upon
the consummation of the Offering, plus shares of Class A Common Stock 
issuable upon exercise of options, warrants and convertible securities
which are included in the number of shares beneficially owned by such 
person.                                                               

 (5) The general partner of MSLEF and the general partner of the general partner
of the MSCP Funds are wholly owned subsidiaries of Morgan Stanley Dean
Witter & Co., the parent of Morgan Stanley & Co. Incorporated.        

(6) The shares beneficially owned by Citicorp Venture Capital, Ltd. include   
157,103 shares held by an affiliate of Citicorp.                      

(7) All of such shares are held by Thompson Holdings, L.P., a limited         
     partnership of which Mr. Thompson is a limited partner with a trust for the
 benefit of his family. Mr. Thompson is also the sole shareholder of the
corporation which is the general partner of the limited partnership.  

(8) The shares beneficially owned by Mr. Schroeder include 114,565 shares held
 by The Living Trust of Horst W. Schroeder and 11,406 shares held by The
Living Trust of Gisela I. Schroeder for the benefit of Mr. and Ms.    
Schroeder, respectively, and members of their family, as well as 3,066
  shares held by each of Bernd Schroeder and Isabel Lange, children of Mr.
and Ms. Schroeder. Mr. Schroeder has voting power, but not investment 
power, with respect to all of these shares. Upon consummation of the  
Offering, Mr. Schroeder will own options to purchase 585,433 shares of
Common Stock under the Company's stock option plans, of which 263,163 
options will be immediately exercisable.                              

(9) Includes options that are currently exercisable or will become exercisable
     within 60 days of the date of this Prospectus to purchase shares of Class A
Common Stock as follows: Mr. Schroeder (318,566 shares), Mr. Webster  
  (318,566 shares), Mr. Watson (44,899 shares), Mr. Abreo (62,976 shares),
   Mr. Bailey (36,154 shares), and all executive officers and directors as a
   group (781,161 shares). Upon consummation of the Offering, Mr. Abreo will
    own options to purchase 130,970 shares of Common Stock under the Company's
stock option plans, of which 53,938 options will be immediately       
exercisable.                                                          

(10) Includes 355,248 shares held by George K. Baum Capital Partners, L.P. and  
21,611 shares held by George K. Baum Employee Equity Fund, L.P. As an 
   officer and/or equity owner of the entities holding such shares, Mr. Baum
   has voting power with respect to such shares. Except to the extent of his
 equity interest in the entities holding such shares, Mr. Baum disclaims
beneficial ownership of such shares.                                  

(11) Includes 14,435 shares beneficially owned by Mr. Webster which are held in 
    various trusts for the benefit of Mr. Webster's family members, as well as
  certain members of Mr. Webster's extended family. Mr. Webster has voting
   power, but not investment power, with respect to all of such shares. Upon
consummation of the Offering, Mr. Webster will own options to purchase
 708,074 shares of Common Stock of the Company under the Company's stock
 option plans, of which 263,163 options will be immediately exercisable.

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DESCRIPTION OF CAPITAL STOCK

GENERAL                                                                         

   The authorized capital stock of the Company consists of 75,000,000 shares
of Class A Common Stock, 25,000,000 shares of Class B Common Stock, and         
10,000,000 shares of preferred stock, par value $.001 per share, issuable in    
series (the "Preferred Stock"). From time to time, shares of Class A Common     
Stock held by the Morgan Stanley Stockholders will automatically be converted   
pursuant to the Charter into shares of Class B Common Stock on a one-for-one    
basis, pro rata in proportion to the number of shares of Class A Common Stock   
held by all Morgan Stanley Stockholders, to the extent necessary so that the    
Morgan Stanley Stockholders do not in the aggregate own more than 49% of the    
then-outstanding shares of Class A Common Stock. See "-- Common Stock -- Class A
Common Stock." This limitation on the ownership of Class A Common Stock is      
intended to enhance the flexibility of the Company in entering into possible    
future business combinations on terms favorable to the Company and its          
stockholders.                                                                   

  The following discussion is a summary of the more detailed provisions of
the Charter and By-Laws of the Company, forms of which have been filed as       
exhibits to the Registration Statement of which this Prospectus is a part, and  
of the applicable provisions of the DGCL. The term "Morgan Stanley Stockholders"
as referenced herein under the caption "Description of Capital Stock" shall have
the meaning given to it in the Company's Charter.                               

COMMON STOCK                                                                    

    Class A Common Stock.  Holders of Class A Common Stock are entitled to one
vote for each share of Class A Common Stock on each matter submitted to a vote  
of stockholders, including the election of directors. See "Certain Relationships
and Related Transactions -- Stockholders Agreement." Holders of Class A Common  
Stock are not entitled to cumulative voting. Shares of Class A Common Stock have
no preemptive or other subscription rights. Shares of Class A Common Stock are  
convertible only by the Morgan Stanley Stockholders into an equal number of     
shares of Class B Common Stock; they are not convertible by any other holders.  
After the consummation of the Offering, shares of Class A Common Stock held by  
the Morgan Stanley Stockholders will, to the extent necessary so that the Morgan
Stanley Stockholders do not own more than 49% of the outstanding shares of Class
A Common Stock, be converted automatically into shares of Class B Common Stock  
on a one-for-one basis, pro rata in proportion to the number of shares of Class 
A Common Stock held by all Morgan Stanley Stockholders. In addition, shares of  
Class A Common Stock held by the Morgan Stanley Stockholders are convertible    
into an equal number of shares of Class B Common Stock, at the option of the    
holder.                                                                         

    Class B Common Stock.  Under the Charter, Class B Common Stock may be held
only by Morgan Stanley Stockholders. Holders of Class B Common Stock have no    
right to vote on matters submitted to a vote of stockholders, except (i) as     
otherwise required by law and (ii) that the holders of Class B Common Stock     
shall have the right to vote as a class on any amendment, repeal or modification
to the Charter that adversely affects the powers, preferences or special rights 
of the holders of the Class B Common Stock. Shares of Class B Common Stock have 
no preemptive or other subscription rights and are convertible into an equal    
number of shares of Class A Common Stock (x) at the option of the holder thereof
(but, after the consummation of the Offering, only to the extent that, following
such conversion, the Morgan Stanley Stockholders will not, in the aggregate, own
more than 49% of the outstanding shares of Class A Common Stock) and (y)        
automatically upon the transfer of such shares by any Morgan Stanley Stockholder
to a person that is not a Morgan Stanley Stockholder.                           

Dividends.  All holders of Common Stock are entitled to receive such  
dividends or other distributions, if any, as may be declared from time to time  
by the Board of Directors in its discretion out of funds legally available      
therefor, subject to the prior rights of any Preferred Stock then outstanding,  
and to share equally, share for share, in such dividends or other distributions 
as if all shares of Common Stock were a single class. Dividends or other        
distributions declared or paid in shares of Common Stock, or options, warrants  
or rights to acquire such stock or securities convertible into or exchangeable  
for shares of such stock, are payable to all of the holders of Common Stock     
ratably according to the number of shares held by them, in shares of Class A    
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Common Stock to holders of that class of stock and in shares of Class B Common  
Stock to holders of that class of stock. Delaware law generally requires that   
dividends be paid only out of the Company's surplus or current net profits in   
accordance with the DGCL. See "Dividend Policy."                                

Liquidation.  Subject to the rights of any holders of Preferred Stock 
outstanding, upon the dissolution, liquidation or winding up of the Company, the
holders of Common Stock are entitled to share equally and ratably in the assets 
available for distribution after payments are made to the Company's creditors.  

Other.  Holders of Common Stock have no preemptive, subscription or   
redemption rights. The outstanding shares of Common Stock are, and the shares of
Class A Common Stock offered by the Company hereby will be, when issued and paid
for, fully paid and nonassessable.                                              

PREFERRED STOCK                                                                 

   The Company's Charter provides that the Board of Directors is authorized,
subject to certain limitations prescribed by law, without further stockholder   
approval, to issue from time to time up to an aggregate of 10,000,000 shares of 
Preferred Stock in one or more series and to fix or alter the designations,     
preferences, rights and any qualifications, limitations or restrictions of the  
shares of each such series thereof, including the dividend rights, dividend     
rates, conversion rights, voting rights, terms of redemption (including sinking 
fund provisions), redemption price or prices, liquidation preferences and the   
number of shares constituting any series or designations of such series. The    
issuance of Preferred Stock may have the effect of delaying, deferring or       
preventing a change in control of the Company. The rights, preferences and      
privileges of holders of Common Stock are subject to, and may be adversely      
affected by, the rights of the holders of shares of any series of Preferred     
Stock which the Company may designate and issue in the future. The Company has  
no present plans to issue any shares of Preferred Stock.                        

DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS                          

     The provisions of the Company's Charter, By-Laws and Delaware statutory law
described in this section may delay or make more difficult acquisitions or      
changes in control of the Company that are not approved by the Board of         
Directors. See "Risk Factors -- Possible Anti-takeover Effect of Certain        
Charter, By-law and Statutory Provisions."                                      

The Company is subject to the provisions of Section 203 of the DGCL.  
Subject to certain exceptions, Section 203 prohibits a publicly-held Delaware   
corporation from engaging in a "business combination" with an "interested       
stockholder" for a period of three years after the date of the transaction in   
which the person became an interested stockholder, unless the interested        
stockholder attained such status with the approval of the Board of Directors or 
unless the business combination is approved in a prescribed manner. A "business 
combination" includes mergers, asset sales and other transactions resulting in a
financial benefit to the interested stockholder. Subject to certain exceptions, 
an "interested stockholder" is a person who, together with affiliates and       
associates, owns, or within three years did own, 15% or more of the             
corporation's voting stock.                                                     

    The Charter provides for the division of the Board of Directors into three
classes as nearly equal in size as possible with staggered three-year terms. See
"Management." Except as may be provided in any class or series of Preferred     
Stock with respect to any directors elected by the holders of such class or     
series, any director, or the entire Board of Directors, may be removed from     
office at any time, but only for cause and only by the affirmative vote of the  
holders of at least two-thirds of the voting power of all of the shares of      
capital stock of the corporation then entitled to vote generally in the election
of directors, voting together as a single class, unless the removal of a        
director has been requested by a shareholder who designated such director as a  
nominee for election pursuant to the Stockholders Agreement, in which case such 
director can be removed with or without cause by the affirmative vote of holders
of a simple majority of such shares.                                            

  The Company's Charter provides that special meetings of the stockholders
may be called at any time by resolution of the Board of Directors, the Chairman 
of the Board, or the Chief Executive Officer, but may not be called by other    
persons. The Charter also provides that any stockholder action may not be taken 
by written                                                                      

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consent of stockholders without a meeting, unless the action to be effected by  
written consent of stockholders and the taking of such action by written consent
have been approved in advance by the Board of Directors or unless the           
shareholder action involves the removal of a director nominated pursuant to the 
Stockholders Agreement and the person who nominated such director pursuant to   
the Stockholders Agreement votes in favor of the removal of such director       
pursuant to such written consent.                                               

    The Charter further provides that stockholders may make, alter, amend, add
to or repeal the By-laws only if, in addition to any vote of the holders of any 
class or series of capital stock of the Corporation required by law or the      
Charter, such action is approved by the affirmative vote of the holders of at   
least 80% of the voting power of all of the then outstanding shares of capital  
stock of the Company entitled to vote generally in the election of directors,   
voting together as a single class. The affirmative approval of at least 80% of  
the voting power of all of the then outstanding shares of the capital stock of  
the Corporation entitled to vote generally in the election of directors, voting 
together as a single class, is also required to reduce or eliminate the number  
of authorized shares of any capital stock set forth in the Charter or to amend, 
repeal or adopt any provision inconsistent with specified provisions of the     
Charter.                                                                        

  As permitted by DGCL, the Charter provides that directors of the Company
shall not be personally liable to the Company or its stockholders for monetary  
damages for breach of fiduciary duty as a director by reason of any act or      
omission, except for liability (i) for any breach of the director's duty of     
loyalty to the Company or its stockholders, (ii) for acts or omissions not in   
good faith or which involve intentional misconduct or a knowing violation of    
law, (iii) under Section 174 of the DGCL, (iv) for any transaction from which   
the director shall derive an improper personal benefit or (v) to any extent that
such liability shall not be limited or eliminated by virtue of the provisions of
Section 102(b)(7) of the DGCL or any successor thereof. In addition, the Charter
provides that the Company shall, to the fullest extent authorized by the DGCL,  
as amended from time to time, indemnify and hold harmless all directors and     
officers against all expense, liability and loss reasonably incurred or suffered
by such indemnitee in connection therewith. Such indemnification shall continue 
as to an indemnitee who has ceased to be a director or officer and shall inure  
to the benefit of the indemnitee's heirs, executors and administrators. The     
right to indemnification includes the right to be advanced funds from the       
Company for expenses incurred in defending any proceeding for which a right to  
indemnification is applicable.                                                  

STOCKHOLDERS AGREEMENT                                                          

 Pursuant to the Stockholders Agreement, the Morgan Stanley Stockholders
have the right to designate one director nominee so long as the Morgan Stanley  
Stockholders own any shares of the outstanding Common Stock of the Company. See 
"Certain Relationships and Related Transactions -- Stockholders Agreement."     

LISTING                                                                         

The Class A Common Stock is traded on the New York Stock Exchange.    

TRANSFER AGENT AND REGISTRAR                                                    

 The transfer agent and registrar for the Common Stock is UMB Bank, N.A.

SHARES ELIGIBLE FOR FUTURE SALE 

 Upon consummation of the Offering, the Company will have outstanding an
aggregate of 17,978,680 shares of Common Stock assuming no exercise of          
outstanding stock options. Of these shares, all of the 5,400,000 shares of      
Common Stock sold in the Offering will be freely tradable without restriction or
further registration under the Securities Act by persons other than "affiliates"
of the Company as that term is defined in Rule 144 under the Securities Act (the
"Affiliates"). Of the remaining 12,578,680 shares, 3,493,680 shares of Common   
Stock held by certain existing stockholders are "restricted securities" as that 
term is defined in Rule 144 under the Securities Act (the "Restricted Shares"). 
These Restricted Shares were acquired in transactions exempt from registration  
under the Securities Act and may not be resold unless they are                  

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registered under the Securities Act or are sold pursuant to an applicable       
exemption from registration, such as Rule 144, Rule 144(k) or Rule 701          
promulgated under the Securities Act.                                           

 In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated in accordance with the Rule) who has beneficially   
owned Restricted Shares for at least one year or any person who may be deemed an
affiliate of the Company is entitled, subject to certain conditions, to sell    
within any three-month period a number of shares of which does not exceed the   
greater of (i) one percent of the Company's then outstanding shares of Common   
Stock (approximately 179,787 shares immediately after the Offering, assuming no 
exercise of outstanding stock options) or (ii) the average weekly trading volume
of the Common Stock during the four calendar weeks preceding such sale. Sales   
under Rule 144 are also subject to certain manner-of-sale and notice            
requirements and the availability of current public information about the       
Company. A person (or persons whose shares are aggregated in accordance with the
Rule) who is not an "affiliate" of the Company at any time during the 90 days   
preceding a sale and who beneficially owns shares that were not acquired from   
the Company or an affiliate of the Company within the past two years is entitled
to sell such shares under Rule 144(k) without regard to volume limitations,     
manner of sale provisions, notice requirements or the availability of current   
public information on the Company. In general, under Rule 701 as currently in   
effect, any employee, consultant or advisor of the Company who purchased shares 
from the Company in connection with a compensatory stock or option plan or other
written agreement is eligible to resell such shares 90 days after the effective 
date of this Offering in reliance on Rule 144, but without compliance with      
certain restrictions, including the holding period, contained in Rule 144. The  
Commission has proposed an amendment to Rule 144 which may further liberalize   
the provisions of Rule 144.                                                     

Beginning 90 days after the date of this Prospectus, 3,492,680 of the 
Restricted Shares will be eligible for sale on the public market under Rule 144,
provided the conditions of that rule have been met. All of such Restricted      
Shares are subject to lock-up agreements with the Underwriters that prohibit    
their sale or other disposition for 90 days from the date of this Prospectus    
without the prior written consent of Morgan Stanley & Co. Incorporated on behalf
of the Underwriters (except with respect to shares of Common Stock held by the  
Morgan Stanley Stockholders, for which prior written consent of all the U.S.    
Representatives is required).                                                   

    Pursuant to the Stockholders Agreement, the Company has granted the Morgan
Stanley Stockholders and Citicorp certain "demand" registration rights with     
respect to the shares of Common Stock held by them. The other Existing          
Stockholders are entitled, subject to certain limitations, to register shares of
Common Stock in connection with a registration statement prepared by the        
Company. See "Certain Relationships and Related Transactions -- Stockholders    
Agreement."                                                                     

Certain members of the Company's senior management, including Messrs. 
Schroeder, Webster, Watson, Abreo, Potter, Dear and Bailey have agreed to       
certain restrictions and limitations on the transferability of shares of Common 
Stock owned by them as provided in the Stockholders Agreement. See "Certain     
Relationships and Related Transactions -- Stockholders Agreement." Subject to   
the lock-up period describe above, the Morgan Stanley Stockholders may choose to
dispose of the Common Stock owned by them. The timing of such sales or other    
dispositions by such stockholders (which could include distributions to the     
Morgan Stanley Stockholders' limited partners) will depend on market and other  
conditions, but could occur relatively soon after the lock-up period, including 
pursuant to the exercise of their registration rights. The Morgan Stanley       
Stockholders are unable to predict the timing of sales by any of their limited  
partners in the event of a distribution to them. Such dispositions could be     
privately negotiated transactions or public sales.                              

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CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSIDERATIONS FOR NON-U.S. HOLDERS 

     In the opinion of Sonnenschein Nath & Rosenthal, the following is a summary
of certain of the material United States federal income and estate tax          
consequences of the ownership and disposition of Class A Common Stock applicable
to "Non-United States Holders." A "Non-United States Holder" is any beneficial  
owner of Class A Common Stock that, for United States federal income or estate  
tax purposes, as the case may be, is a non-resident alien individual, a foreign 
corporation, a foreign partnership or a foreign estate or trust as such terms   
are defined in the Internal Revenue Code of 1986, as amended (the "Code"). This 
summary is based on the Code and administrative and judicial interpretations as 
of the date hereof, all of which are subject to change either retroactively or  
prospectively. This summary does not address all aspects of United States       
federal income and estate taxation that may be relevant to Non-United States    
Holders in light of their particular circumstances (such as certain tax         
consequences applicable to United States expatriates, insurance companies,      
tax-exempt organizations, financial institutions, broker-dealers and            
pass-through entities) and does not address any tax consequences arising under  
the laws of any state, local or foreign taxing jurisdiction or the application  
of a particular tax treaty. Prospective investors are urged to consult their tax
advisors regarding the United States federal, state and local income and other  
tax consequences, and the non-United States tax consequences, of owning and     
disposing of Class A Common Stock.                                              

DIVIDENDS                                                                       

   Subject to the discussion below, any dividend paid to a Non-United States
Holder generally will be subject to United States withholding tax either at a   
rate of 30% of the gross amount of the dividend or such lower rate as may be    
specified by an applicable tax treaty. For purposes of determining whether tax  
is to be withheld at a 30% rate, or at a reduced rate as specified by an        
applicable tax treaty, under current United States Treasury Regulations the     
Company ordinarily will presume that dividends paid on or before December 31,   
1999 to a holder with an address in a foreign country are paid to a resident of 
such country absent knowledge that such presumption is not warranted. Under such
Regulations, dividends paid on or before December 31, 1999 to a holder with an  
address within the United States generally will be presumed to be paid to a     
holder who is not a Non-United States Holder and will not be subject to the 30% 
withholding tax, unless the Company has actual knowledge that the holder is a   
Non-United States Holder.                                                       

Recently finalized United States Treasury Regulations applicable to   
dividends paid after December 31, 1999 (the "Final Regulations") (which, until  
such date was extended, was to apply to dividends paid after December 31, 1998) 
provide for certain presumptions (which differ from those described above) upon 
which the Company may generally rely to determine whether, in the absence of    
certain documentation, a holder should be treated as a Non-United States Holder 
for purposes of the 30% withholding tax described above (rather than a U.S.     
person subject to the backup withholding rules discussed below). The            
presumptions would not apply for purposes of granting a reduced rate of         
withholding under a treaty. Under the Final Regulations, to obtain a reduced    
rate of withholding under a treaty a Non-United States Holder will be required  
either (i) to provide an Internal Revenue Service Form W-8 certifying such      
Non-United States Holder's entitlement to benefits under a treaty together with,
in certain circumstances, additional information or (ii) satisfy certain other  
applicable certification requirements. The Final Regulations also provide       
special rules to determine whether, for purposes of determining the             
applicability of a tax treaty and for purposes of the 30% withholding tax       
described above, dividends paid to a Non-United States Holder that is an entity 
should be treated as paid to the entity or those holding an interest in that    
entity.                                                                         

Dividends received by a Non-United States Holder that are effectively 
connected with a United States trade or business conducted by such Non-United   
States Holder are exempt from withholding tax. However, such effectively        
connected dividends are subject to regular United States income tax in the same 
manner as if the Non-United States Holder were a United States person for       
federal income tax purposes. Effectively connected dividends may be subject to a
different treatment under an applicable tax treaty depending on whether such    
dividends are attributable to a permanent establishment of the Non-United States
Holder in the United States. A Non-United States Holder may claim exemption from
withholding under the effectively connected income exception by filing Internal 
Revenue Service Form 4224 (Exemption from Withholding of                        
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Tax on Income Effectively Connected With the Conduct of a Trade or Business in  
the United States) each year with the Company or its paying agent prior to the  
payment of the dividends for such year. The Final Regulations will replace Form 
4224 with Form W-8 and certain additional information. Effectively connected    
dividends received by a corporate Non-United States Holder may be subject to an 
additional "branch profits tax" at a rate of 30% (or such lower rate as may be  
specified by an applicable tax treaty) of such corporate Non-United States      
Holder's effectively connected earnings and profits, subject to certain         
adjustments.                                                                    

 A Non-United States Holder eligible for a reduced rate of United States
withholding tax pursuant to a tax treaty may obtain a refund of any excess      
amounts currently withheld by filing an appropriate claim for refund with the   
United States Internal Revenue Service ("IRS").                                 

GAIN ON DISPOSITION OF CLASS A COMMON STOCK                                     

   A Non-United States Holder generally will not be subject to United States
federal income tax with respect to gain realized upon the sale or other         
disposition of Class A Common Stock unless (i) such gain is effectively         
connected with a United States trade or business of the Non-United States       
Holder; (ii) the Non-United States Holder is a non-resident alien individual who
holds the Class A Common Stock as a capital asset, is present in the United     
States for a period or periods aggregating 183 days or more during the calendar 
year in which such sale or disposition occurs, and either the non-resident alien
individual has a "tax home" in the United States or the sale is attributable to 
an office or other fixed place of business maintained by the non-resident alien 
individual in the United States; or (iii) the Company is or has been a "United  
States real property holding corporation" for federal income tax purposes at any
time within the shorter of the five-year period ending on the date of the       
disposition or such holder's holding period (the "determination period"). The   
Company has determined that it is not, and does not anticipate becoming a       
"United States real property holding corporation" for federal income tax        
purposes. Even if the Company is a United States real property holding          
corporation for federal income tax purposes at any time during the determination
period, the disposition of Class A Common Stock by a Non-United States Holder   
that did not own more than five percent of the Class A Common Stock during the  
determination period will not be treated as a disposition of an interest in a   
United States real property holding corporation if the Class A Common Stock is  
treated as "regularly traded on an established securities market" during the    
calendar year. Non-United States Holders should consult applicable tax treaties,
which might result in a United States federal income tax treatment on the sale  
or other disposition of Class A Common Stock different than as described above. 

BACKUP WITHHOLDING AND INFORMATION REPORTING                                    

     Generally, the Company must report to the IRS the amount of dividends paid,
the name and address of the recipient, and the amount, if any, of tax withheld. 
The information reporting requirements apply regardless of whether withholding  
was reduced by an applicable tax treaty or if withholding was not required      
because the dividends were effectively connected with a trade or business in the
United States of the Non-United States Holder. A similar report is sent to the  
holder. Pursuant to tax treaties or other agreements, the IRS may make its      
reports available to tax authorities in the recipient's country of residence.   

  Under current United States Treasury Regulations, unless the Company has
actual knowledge that a holder is a Non-United States Holder, dividends paid on 
or before December 31, 1999 to a holder at an address within the United States  
may be subject to backup withholding at a rate of 31% and additional information
reporting if the holder is not an "exempt recipient" as defined in Treasury     
Regulations (which includes corporations) and fails to provide a correct        
taxpayer identification number and other information to the Company. In         
addition, backup withholding and such additional information reporting will     
generally not apply to dividends paid on or before December 31, 1999 to holders 
at an address outside the United States (unless the Company has knowledge that  
the holder is a United States person) or to dividends paid on or before December
31, 1999 to Non-United States Holders that are either subject to the United     
States withholding tax (whether at 30% or a reduced rate) or that are exempt    
from such withholding because such dividends constitute effectively connected   
income. For dividends paid after December 31, 1999, the Final Regulations       
provide certain presumptions and other rules under which Non-United States      
Holders may be subject to backup withholding and related information reporting  
in the absence of required certifications.                                      
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Under current United States Treasury Regulations, proceeds from the   
disposition of Class A Common Stock by a Non-United States Holder effected by or
through a United States office of a broker will be subject to information       
reporting and to backup withholding at a rate of 31% of the gross proceeds      
unless such Non-United States Holder certifies under penalties of perjury as to 
its name, address and status as a Non-United States Holder or otherwise         
establishes an exemption. Generally, United States information reporting and    
backup withholding will not apply to a payment of disposition proceeds if the   
transaction is effected outside the United States by or through a non-United    
States office of a broker. However, United States information reporting         
requirements (but not backup withholding) will apply to a payment of disposition
proceeds where the transaction is effected outside the United States if (a) the 
disposition is made through an office outside the United States of a broker that
is either (i) a United States person for United States federal income tax       
purposes, (ii) a "controlled foreign corporation" for United States federal     
income tax purposes, (iii) a foreign person which derives 50% or more of its    
gross income for certain periods from the conduct of a United States trade or   
business or (iv) effective after December 31, 1999, certain brokers that are    
foreign partnerships with U.S. partners or that are engaged in a U.S. trade or  
business, and (b) the broker fails to maintain documentary evidence in its files
that the holder is a Non-United States Holder and that certain conditions are   
met or that the holder otherwise is entitled to an exemption. For proceeds from 
the disposition of the Class A Common Stock after December 31, 1999, the Final  
Regulations provide more detailed rules concerning such documentation.          

   Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax      
withheld. If backup withholding results in an overpayment of United States      
income taxes, a refund may be obtained, provided that the required documents are
filed with the IRS.                                                             

ESTATE TAX                                                                      

     An individual Non-United States Holder who is treated as the owner of Class
A Common Stock at the time of such individual's death or has made certain       
lifetime transfers of an interest in Class A Common Stock will be required to   
include the value of such Class A Common Stock in such individual's gross estate
for United States federal estate tax purposes and may be subject to United      
States federal estate tax, unless an applicable tax treaty provides otherwise.  

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UNDERWRITERS

     Under the terms and subject to the conditions in the Underwriting Agreement
dated the date hereof (the "Underwriting Agreement"), the U.S. Underwriters     
named below for whom Morgan Stanley & Co. Incorporated, BT Alex. Brown          
Incorporated, Goldman, Sachs & Co. and George K. Baum & Company are acting as   
U.S. Representatives, and the International Underwriters named below for whom   
Morgan Stanley & Co. International Limited, BT Alex. Brown International, a     
division of Bankers Trust International PLC, Goldman Sachs International and    
George K. Baum & Company are acting as International Representatives, have      
severally agreed to purchase, and the Company has agreed to sell to them,       
severally, the respective numbers of shares of Class A Common Stock set forth   
opposite the names of such Underwriters below:                                  

                                                                [Download Table]

                                                                NUMBER OF
                                                                 SHARES  
                            NAME                                ---------
                                                                         
U.S. Underwriters:                                                       
  Morgan Stanley & Co. Incorporated.........................      761,250
  BT Alex. Brown Incorporated...............................      761,250
  Goldman, Sachs & Co.......................................      761,250
  George K. Baum & Company..................................      761,250
  Burnham Securities Inc....................................       75,000
  Donaldson, Lufkin & Jenrette Securities Corporation.......      150,000
  A.G. Edwards & Sons, Inc..................................      150,000
  Furman Selz LLC...........................................      150,000
  Janney Montgomery Scott Inc...............................       75,000
  Edward D. Jones & Co., L.P................................       75,000
  Merrill Lynch, Pierce, Fenner & Smith Incorporated........      150,000
  Nationsbanc Montgomery Securities.........................      150,000
  Prudential Securities Incorporated........................      150,000
  Wasserstein Perella Securities, Inc.......................      150,000
     Subtotal...............................................    4,320,000
                                                                ---------
International Underwriters:                                              
  Morgan Stanley & Co. International Limited................      270,000
  BT Alex. Brown International, a division of Bankers Trust              
     International PLC......................................      270,000
  Goldman Sachs International...............................      270,000
  George K. Baum & Company..................................      270,000
                                                                ---------
     Subtotal...............................................    1,080,000
                                                                ---------
     Total..................................................    5,400,000
                                                                =========

The U.S. Underwriters and the International Underwriters, and the U.S.
Representatives and the International Representatives, are collectively referred
to as the "Underwriters" and the "Representatives," respectively. The           
Underwriting Agreement provides that the obligations of the several Underwriters
to pay for and accept delivery of the shares of Class A Common Stock offered    
hereby are subject to the approval of certain legal matters by their counsel and
to certain other conditions. The Underwriters are obligated to take and pay for 
all of the shares of Class A Common Stock offered hereby (other than those      
covered by the U.S. Underwriters' over-allotment option described below) if any 
such shares are taken.                                                          

     Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. Underwriter has represented and agreed that, with certain exceptions: (i)  
it is not purchasing any Shares (as defined herein) for the account of anyone   
other than a United States or Canadian Person (as defined herein) and (ii) it   
has not offered or sold, and will not offer or sell, directly or indirectly, any
Shares or distribute any prospectus relating to the Shares outside the United   
States or Canada or to anyone other than a United States or Canadian Person.    
Pursuant to the Agreement between U.S. and International Underwriters, each     
International Underwriter has represented and agreed that, with certain         
exceptions: (i) it is not purchasing any Shares for the account of any United   
States or Canadian Person and (ii) it has not offered or sold, and will not     
offer or sell, directly or indirectly, any Shares or distribute any prospectus  
relating to the Shares in the United States or Canada or to any United States or
Canadian Person. With respect to any Underwriter that is a U.S.                 

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Underwriter and an International Underwriter, the foregoing representations and 
agreements (i) made by it in its capacity as a U.S. Underwriter apply only to it
in its capacity as a U.S. Underwriter and (ii) made by it in its capacity as an 
International Underwriter apply only to it in its capacity as an International  
Underwriter. The foregoing limitations do not apply to stabilization            
transactions or to certain other transactions specified in the Agreement between
U.S. and International Underwriters. As used herein, "United States or Canadian 
Person" means any national or resident of the United States or Canada, or any   
corporation, pension, profit-sharing or other trust or other entity organized   
under the laws of the United States or Canada or of any political subdivision   
thereof (other than a branch located outside the United States and Canada of any
United States or Canadian Person), and includes any United States or Canadian   
branch of a person who is otherwise not a United States or Canadian Person. All 
shares of Class A Common Stock to be purchased by the Underwriters under the    
Underwriting Agreement are referred to herein as the "Shares".                  

Pursuant to the Agreement between U.S. and International Underwriters,
sales may be made between the U.S. Underwriters and International Underwriters  
of any number of Shares as may be mutually agreed. The per share price of any   
Shares so sold shall be the public offering price set forth on the cover page   
hereof, in United States dollars, less an amount not greater than the per share 
amount of the concession to dealers set forth below.                            

     Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. Underwriter has represented that it has not offered or sold, and has agreed
not to offer or sell, any Shares, directly or indirectly, in any province or    
territory of Canada or to, or for the benefit of, any resident of any province  
or territory of Canada in contravention of the securities laws thereof and has  
represented that any offer or sale of Shares in Canada will be made only        
pursuant to an exemption from the requirement to file a prospectus in the       
province or territory of Canada in which such offer or sale is made. Each U.S.  
Underwriter has further agreed to send to any dealer who purchases from it any  
of the Shares a notice stating in substance that, by purchasing such Shares,    
such dealer represents and agrees that it has not offered or sold, and will not 
offer or sell, directly or indirectly, any of such Shares in any province or    
territory of Canada or to, or for the benefit of, any resident of any province  
or territory of Canada in contravention of the securities laws thereof and that 
any offer or sale of Shares in Canada will be made only pursuant to an exemption
from the requirement to file a prospectus in the province or territory of Canada
in which such offer or sale is made, and that such dealer will deliver to any   
other dealer to whom it sells any of such Shares a notice containing            
substantially the same statement as is contained in this sentence.              

     Pursuant to the Agreement between U.S. and International Underwriters, each
International Underwriter has represented and agreed that (i) it has not offered
or sold and, prior to the date six months after the closing date for the sale of
the Shares to the International Underwriters, will not offer or sell, any Shares
to persons in the United Kingdom except to persons whose ordinary activities    
involve them in acquiring, holding, managing or disposing of investments (as    
principal or agent) for the purposes of their businesses or otherwise in        
circumstances which have not resulted and will not result in an offer to the    
public in the United Kingdom within the meaning of the Public Offers of         
Securities Regulations 1995; (ii) it has complied and will comply with all      
applicable provisions of the Financial Services Act 1986 with respect to        
anything done by it in relation to the Shares in, from or otherwise involving   
the United Kingdom; and (iii) it has only issued or passed on and will only     
issue or pass on in the United Kingdom any document received by it in connection
with the offering of the Shares to a person who is of a kind described in       
Article 11(3) of the Financial Services Act 1986 (Investment Advertisements)    
(Exemptions) Order 1996 or is a person to whom such document may otherwise      
lawfully be issued or passed on.                                                

     Pursuant to the Agreement between U.S. and International Underwriters, each
International Underwriter has further represented that it has not offered or    
sold, and has agreed not to offer or sell, directly or indirectly, in Japan or  
to or for the account of any resident thereof, any of the Shares acquired in    
connection with the distribution contemplated hereby, except for offers or sales
to Japanese International Underwriters or dealers and except pursuant to any    
exemption from the registration requirements of the Securities and Exchange Law 
and otherwise in compliance with applicable provisions of Japanese law. Each    
International Underwriter has further agreed to send to any dealer who purchases
from it any of the Shares a notice stating in substance that, by purchasing such
Shares, such dealer represents and agrees that it has not offered or sold, and  
will not offer or sell, any of such Shares, directly or indirectly, in Japan or 
to or for the account of any resident thereof                                   

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except for offers or sales to Japanese International Underwriters or dealers and
except pursuant to any exemption from the registration requirements of the      
Securities and Exchange Law and otherwise in compliance with applicable         
provisions of Japanese law, and that such dealer will send to any other dealer  
to whom it sells any of such Shares a notice containing substantially the same  
statement as is contained in this sentence.                                     

   The Underwriters initially propose to offer part of the shares of Class A
Common Stock directly to the public at the public offering price set forth on   
the cover page hereof and part to certain dealers at a price that represents a  
concession not in excess of $.817 a share under the public offering price. Any  
Underwriter may allow, and such dealers may reallow, a concession not in excess 
of $.10 a share to other Underwriters or to certain other dealers. After the    
initial offering of the shares of Class A Common Stock, the offering price and  
other selling terms may from time to time be varied by the Representatives.     

   The Selling Stockholders have granted to the U.S. Underwriters an option,
exercisable for 30 days from the date of this Prospectus, to purchase up to an  
aggregate of 810,000 additional shares of Class A Common Stock at the public    
offering price set forth on the cover page hereof, less underwriting discounts  
and commissions. The U.S. Underwriters may exercise such option solely for the  
purpose of covering over-allotments, if any, made in connection with the        
offering of the shares of Class A Common Stock offered hereby. To the extent    
such option is exercised, each U.S. Underwriter will become obligated, subject  
to certain conditions, to purchase approximately the same percentage of such    
additional shares of Class A Common Stock as the number set forth next to such  
U.S. Underwriter's name in the preceding table bears to the total number of     
shares of Class A Common Stock set forth next to the names of all U.S.          
Underwriters in the preceding table.                                            

     The Underwriters have informed the Company that they do not intend sales to
discretionary accounts to exceed five percent of the total number of shares of  
Class A Common Stock offered by them.                                           

     Each of the Company and the directors, executive officers and certain other
stockholders of the Company has agreed that, without the prior written consent  
of Morgan Stanley & Co. Incorporated on behalf of the Underwriters (except with 
respect to shares of Common Stock held by the Morgan Stanley Stockholders, for  
which prior written consent of all the U.S. Representatives is required), it    
will not, during the period ending 90 days after the date of this Prospectus,   
(i) offer, pledge, sell, contract to sell, sell any option or contract to       
purchase, purchase any option or contract to sell, grant any option, right or   
warrant to purchase, lend, or otherwise transfer or dispose of, directly or     
indirectly, any shares of Class A Common Stock or any securities convertible    
into or exercisable or exchangeable for Class A Common Stock (provided that such
shares or securities are either owned on the date of this Prospectus or are     
hereinafter acquired prior to or in connection with the Offering) or (ii) enter 
into any swap or other arrangement that transfers to another, in whole or in    
part, any of the economic consequences of ownership of the Class A Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be     
settled by delivery of Class A Common Stock or such other securities, in cash or
otherwise. The restrictions described in this paragraph do not apply to (a) the 
sale of the Shares to the Underwriters, (b) the issuance by the Company of      
shares of Common Stock upon the exercise of an option or a warrant or the       
conversion of a security outstanding on the date of this Prospectus, (c) the    
issuance of shares in connection with the conversion from time to time of the   
Class A Common Stock into Class B Common Stock (and vice versa), (d) the grants 
of stock options to employees, directors or consultants pursuant to the terms of
a plan disclosed herein which first became exercisable more than 90 days after  
the date of the Prospectus, (e) the issuance by the Company of shares of Common 
Stock pursuant to any existing 401(k) plan, (f) bona fide charitable donations  
or estate planning dispositions, provided that, prior to such transfer, the     
transferee in any such transaction agrees in writing to be bound by the terms of
this paragraph and the form and substance of such writing has received written  
approval from Morgan Stanley & Co. Incorporated or (g) transfers due to the     
death or disability of a seller, provided that the transferee agrees in writing 
to be bound by the terms of this paragraph and the form and substance of such   
writing has received written approval from Morgan Stanley & Co. Incorporated.   

In order to facilitate the offering of the Class A Common Stock, the  
Underwriters may engage in transactions that stabilize, maintain or otherwise   
affect the price of the Class A Common Stock. Specifically, the Underwriters may
over-allot in connection with the Offering, creating a short position in the    
Class A Common Stock for their own account. In addition, to cover               
over-allotments or to stabilize the price of the                                

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Class A Common Stock, the Underwriters may bid for, and purchase, shares of     
Class A Common Stock in the open market. Finally, the underwriting syndicate may
reclaim selling concessions allowed to an Underwriter or a dealer for           
distributing the Class A Common Stock in the Offering, if the syndicate         
repurchases previously distributed Class A Common Stock in transactions to cover
syndicate short positions, in stabilization transactions or otherwise. Any of   
these activities may stabilize or maintain the market price of the Class A      
Common Stock above independent market levels. The Underwriters are not required 
to engage in these activities, and may end any of these activities at any time. 

   The Company, the Selling Stockholders and the Underwriters have agreed to
indemnify each other against certain liabilities, including liabilities under   
the Securities Act.                                                             

The Underwriters have agreed to pay certain expenses, other than      
underwriting discounts and commissions, incurred in connection with the         
Offering.                                                                       

Upon consummation of the Offering, affiliates of Morgan Stanley & Co. 
Incorporated and Morgan Stanley & Co. International Limited will own 7.8% of the
Common Stock (3.4% if the over-allotment option granted to the U.S. Underwriters
is exercised in full). Currently, affiliates of Morgan Stanley & Co.            
Incorporated and Morgan Stanley & Co. International Limited have designated two 
members to the Board of Directors (Messrs. Niehaus and Sorrel). Messrs. Niehaus 
and Sorrel are employees of Morgan Stanley & Co. Incorporated. See "Management."
From time to time, Morgan Stanley & Co. Incorporated and its affiliates have    
provided, and continue to provide, investment banking and financial advisory    
services to the Company for which they have received customary fees and         
commissions.                                                                    

     Prior to October 1997, Morgan Stanley Senior Funding, Inc., an affiliate of
Morgan Stanley & Co. Incorporated, one of the U.S. Underwriters, served as      
documentation agent under the agreements relating to the Company's Credit       
Facility, and acted as arranger for the Credit Facility for which it received a 
customary fee. Morgan Stanley Senior Funding, Inc. also provides other general  
financing and banking services to the Company and its affiliates from time to   
time. Morgan Stanley & Co. Incorporated also served as one of the U.S. and      
International Underwriters in connection with the Company's initial public      
offering in October 1997 for which it received customary underwriting fees.     
Bankers Trust Company, an affiliate of BT Alex. Brown Incorporated (which is one
of the U.S. Underwriters) and BT Alex. Brown International (which is one of the 
International Underwriters), is administrative agent and a lender under the     
Company's Credit Facility. From time to time, George K. Baum & Company has      
provided, and continues to provide, investment banking and financial advisory   
services to the Company for which it has received customary fees and            
commissions. George K. Baum & Company also served as one of the U.S. and        
International Underwriters in connection with the Company's initial public      
offering in October 1997 for which it received customary underwriting fees. One 
of the Company's nine directors is a director of George K. Baum & Company.      

     The Class A Common Stock is traded on the New York Stock Exchange under the
symbol "PLB."                                                                   

LEGAL MATTERS 

The validity of the shares of Class A Common Stock offered hereby and 
certain other matters will be passed upon for the Company by Sonnenschein Nath &
Rosenthal, Kansas City, Missouri. Certain legal matters will be passed upon for 
the Underwriters by Davis Polk & Wardwell, New York, New York. Davis Polk &     
Wardwell has performed, and will continue to perform, legal services for the    
Morgan Stanley Stockholders and has acted as counsel to the Morgan Stanley      
Stockholders in connection with their investments in the Company.               

EXPERTS 

     The financial statements of the Company at September 30, 1996 and 1997, and
for the fiscal year ended December 31, 1995, for the nine-month fiscal period   
ended September 30, 1996 and the fiscal year ended September 30, 1997 appearing 
in this Prospectus and Registration Statement have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon appearing       
elsewhere herein, and are included in reliance upon such report given upon the  
authority of such firm as experts in accounting and auditing.                   

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AMERICAN ITALIAN PASTA COMPANY

INDEX TO FINANCIAL STATEMENTS 

                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
Report of Independent Auditors..............................  F-2 
Balance Sheets at September 30, 1996 and 1997 and December        
  31, 1997 (unaudited)......................................  F-3 
Statements of Operations for the fiscal year ended December       
  31, 1995, the fiscal nine-months ended September 30, 1996       
  and the fiscal year ended September 30, 1997 and for the        
  three-month periods ended December 31, 1996 and 1997            
  (unaudited)...............................................  F-4 
Statements of Stockholders' Equity for the fiscal year ended      
  December 31, 1995, the fiscal nine-months ended September       
  30, 1996 and the fiscal year ended September 30, 1997 and       
  for the three-month period ended December 31, 1997              
  (unaudited)...............................................  F-5 
Statements of Cash Flows for the fiscal year ended December       
  31, 1995, the fiscal nine-months ended September 30, 1996       
  and the fiscal year ended September 30, 1997 and for the        
  three-month periods ended December 31, 1996 and 1997            
  (unaudited)...............................................  F-6 
Notes to Financial Statements...............................  F-7 

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REPORT OF INDEPENDENT AUDITORS

The Board of Directors                                                          
American Italian Pasta Company                                                  

   We have audited the accompanying balance sheets of American Italian Pasta
Company (the Company) as of September 30, 1996 and 1997, and the related        
statements of operations, stockholders' equity and cash flows for the year ended
December 31, 1995, the nine-month fiscal period ended September 30, 1996 and the
fiscal year ended September 30, 1997. These financial statements are the        
responsibility of the Company's management. Our responsibility is to express an 
opinion on these financial statements based on our audits.                      

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of American Italian Pasta      
Company at September 30, 1996 and 1997, and the results of its operations and   
its cash flows for the year ended December 31, 1995, the nine-month fiscal      
period ended September 30, 1996 and the fiscal year ended June 30, 1997 in      
conformity with generally accepted accounting principles.                       

                         /s/ ERNST & YOUNG LLP

Kansas City, Missouri                                                           
October 27, 1997 except Note 13, as                                             
to which the date is April 6, 1998                                          

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AMERICAN ITALIAN PASTA COMPANY

BALANCE SHEETS

                                                        [Enlarge/Download Table]

                                                          SEPTEMBER 30,   SEPTEMBER 30,  DECEMBER 31,
                                                              1996            1997           1997    
                                                          -------------   -------------  ------------
                                                                                         (UNAUDITED) 
                                                                         (IN THOUSANDS)              
                                                                                                     
                                    ASSETS (Note 2)                                                  
Current assets:                                                                                      
  Cash and temporary investments........................    $  1,818        $  2,724       $  1,687  
  Trade and other receivables...........................      12,494           9,180         12,799  
  Prepaid expenses and deposits.........................       1,879           1,028          2,656  
  Inventory.............................................      14,374          13,675         15,282  
  Deferred income taxes (Note 3)........................         269             635            257  
                                                            --------        --------       --------  
Total current assets....................................      30,834          27,242         32,681  
Property, plant and equipment:                                                                       
  Land and improvements.................................       4,413           4,540          4,540  
  Buildings.............................................      37,491          37,491         37,491  
  Plant and mill equipment..............................      81,461          84,233         84,685  
  Furniture, fixtures and equipment.....................       3,635           4,581          4,900  
                                                            --------        --------       --------  
                                                             127,000         130,845        131,616  
  Accumulated depreciation..............................     (23,247)        (29,332)       (31,019) 
                                                            --------        --------       --------  
                                                             103,753         101,513        100,597  
  Construction in progress..............................          --          23,721         49,637  
                                                            --------        --------       --------  
Total property, plant and equipment.....................     103,753         125,234        150,234  
Deferred income taxes (Note 3)..........................       4,479           1,124          1,359  
Other assets............................................       2,622           4,575            659  
                                                            --------        --------       --------  
Total assets............................................    $141,688        $158,175       $184,933  
                                                            ========        ========       ========  
                         LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Current liabilities:                                                                                 
  Accounts payable......................................    $  7,193        $  8,644       $ 10,729  
  Income tax payable....................................          --             134          1,003  
  Accrued expenses......................................       3,664           5,447          5,919  
  Current maturities of long-term debt (Notes 2 & 12)...       8,078             829            913  
  Revolving line of credit facility (Notes 2 & 12)......      13,500              --             --  
                                                            --------        --------       --------  
Total current liabilities...............................      32,435          15,054         18,564  
Long-term debt (Notes 2 & 12)...........................      93,284         100,137         35,638  
Commitments and contingencies (Note 4)                                                               
Stockholders' equity: (Notes 6, 11 & 12)                                                             
  Preferred stock, $.001 par value:                                                                  
     Authorized shares 10,000,000.......................          --              --             --  
  Class A common stock, $.001 par value:                                                             
     Authorized shares -- 75,000,000....................           8              11             16  
  Class B common stock, $.001 par value:                                                             
     Authorized shares -- 25,000,000....................          --              --             --  
  Additional paid-in capital............................      33,071          55,324        142,008  
  Notes receivable from officers........................          --            (298)          (273) 
  Accumulated deficit...................................     (17,110)        (12,053)       (11,020) 
                                                            --------        --------       --------  
Total stockholders' equity..............................      15,969          42,984        130,731  
                                                            --------        --------       --------  
Total liabilities and stockholders' equity..............    $141,688        $158,175       $184,933  
                                                            ========        ========       ========  

See accompanying notes to financial statements. 
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AMERICAN ITALIAN PASTA COMPANY

STATEMENTS OF OPERATIONS

                                                        [Enlarge/Download Table]

                                             NINE MONTHS    TWELVE MONTHS                   THREE MONTHS ENDED 
                               YEAR ENDED       ENDED           ENDED        YEAR ENDED        DECEMBER 31,    
                              DECEMBER 31,  SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   -------------------
                                  1995          1996            1996            1997          1996       1997  
                              ------------  -------------   -------------   -------------   --------   --------
                                                             (UNAUDITED)                        (UNAUDITED)    
                                                  (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                     
                                                                                                               
Revenues (Note 5)............   $92,903        $92,074        $121,149        $129,143      $29,547    $35,536 
Cost of goods sold...........    73,851         68,555          91,230          93,467       21,149     25,760 
Plant expansion costs (Note                                                                                    
  8).........................     2,065             --              --              --           --        266 
                                -------        -------        --------        --------      -------    ------- 
Gross profit.................    16,987         23,519          29,919          35,676        8,398      9,510 
Selling and marketing                                                                                          
  expense, including product                                                                                   
  introduction costs (Note                                                                                     
  10)........................     5,303         16,798          18,445          13,664        4,453      2,631 
General and administrative                                                                                     
  expense....................     2,930          2,805           3,686           3,766          693      1,188 
                                -------        -------        --------        --------      -------    ------- 
Operating profit.............     8,754          3,916           7,788          18,246        3,252      5,691 
Interest expense, net........     8,008          8,023          10,770          10,119        2,552        264 
                                -------        -------        --------        --------      -------    ------- 
Income (loss) before income                                                                                    
  tax expense (benefit) and                                                                                    
  extraordinary item.........       746         (4,107)         (2,982)          8,127          700      5,427 
Income tax expense (benefit)                                                                                   
  (Note 3)...................       270         (1,556)         (1,139)          3,070          268      2,062 
                                -------        -------        --------        --------      -------    ------- 
Income (loss) before                                                                                           
  extraordinary item.........       476         (2,551)         (1,843)          5,057          432      3,365 
Extraordinary item:                                                                                            
  Loss due to early                                                                                            
     extinguishment of                                                                                         
     long-term debt, net of                                                                                    
     income taxes (Note 2)...        --         (1,647)         (1,647)             --           --     (2,332)
                                -------        -------        --------        --------      -------    ------- 
Net income (loss)............   $   476        $(4,198)       $ (3,490)       $  5,057      $   432    $ 1,033 
                                =======        =======        ========        ========      =======    ======= 
Net income (loss) per common                                                                                   
  share (Note 13):                                                                                             
Before extraordinary item....   $  0.05        $ (0.25)       $  (0.18)       $   0.44      $  0.04    $  0.20 
Extraordinary item...........        --          (0.16)          (0.16)             --           --      (0.14)
                                -------        -------        --------        --------      -------    ------- 
Total........................   $  0.05        $ (0.41)       $  (0.34)       $   0.44      $  0.04    $  0.06 
                                =======        =======        ========        ========      =======    ======= 
Weighted-average common                                                                                        
  shares outstanding.........    10,195         10,223          10,219          11,466       10,230     16,430 
                                =======        =======        ========        ========      =======    ======= 
Net income (loss) per common                                                                                   
  share -- assuming dilution                                                                                   
  (Note 13):                                                                                                   
Before extraordinary item....   $  0.05        $ (0.25)       $  (0.18)       $   0.42      $  0.04    $  0.19 
Extraordinary item...........        --          (0.16)          (0.16)             --           --      (0.13)
                                -------        -------        --------        --------      -------    ------- 
Total -- assuming dilution...   $  0.05        $ (0.41)       $  (0.34)       $   0.42      $  0.04    $  0.06 
                                =======        =======        ========        ========      =======    ======= 
Weighted-average common                                                                                        
  shares outstanding.........    10,433         10,223          10,219          12,119       10,480     17,455 
                                =======        =======        ========        ========      =======    ======= 

See accompanying notes to financial statements. 
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AMERICAN ITALIAN PASTA COMPANY

STATEMENTS OF STOCKHOLDERS' EQUITY

                                                        [Enlarge/Download Table]

                                                                                     NOTES                                
                                                 CLASS A    CLASS A   ADDITIONAL   RECEIVABLE                    TOTAL    
                                                  COMMON    COMMON     PAID-IN        FROM      ACCUMULATED  STOCKHOLDERS'
                                                  SHARES     STOCK     CAPITAL      OFFICERS      DEFICIT       EQUITY    
                                                ----------  -------   ----------   ----------   -----------  -------------
                                                                    (IN THOUSANDS, EXCEPT SHARE DATA)                     
                                                                                                                          
Balance at December 31, 1994..................   8,201,233    $ 8      $ 32,781      $  --       $(13,388)     $ 19,401   
  Issuance of 38,767 shares of Class A Common                                                                             
    stock.....................................      38,767     --           190         --             --           190   
  Net income..................................          --     --            --         --            476           476   
                                                ----------    ---      --------      -----       --------      --------   
Balance at December 31, 1995..................   8,240,000      8        32,971         --        (12,912)       20,067   
  Issuance of 20,328 shares of Class A Common                                                                             
    stock.....................................      20,328     --           100         --             --           100   
  Net loss....................................          --     --            --         --         (4,198)       (4,198)  
                                                ----------    ---      --------      -----       --------      --------   
Balance at September 30, 1996.................   8,260,328      8        33,071         --        (17,110)       15,969   
  Issuance of 3,174,528 shares of Class A                                                                                 
    Common Stock, net of issuance costs.......   3,174,528      3        22,039         --             --        22,042   
  Notes received from officers in exchange for                                                                            
    stock.....................................          --     --            --       (298)            --          (298)  
  Issuance of 31,200 shares of Class A Common                                                                             
    Stock to employee benefit plan............      31,200     --           214         --             --           214   
  Net income..................................          --     --            --         --          5,057         5,057   
                                                ----------    ---      --------      -----       --------      --------   
Balance at September 30, 1997.................  11,466,056     11        55,324       (298)       (12,053)       42,984   
Issuance of 5,310,000 shares of Class A Common                                                                            
  Stock, net of issuance costs (unaudited)....   5,310,000      5        86,684         --             --        86,689   
Payment on notes receivable from officers                                                                                 
  (unaudited).................................          --     --            --         25             --            25   
Net income (unaudited)........................          --     --            --         --          1,033         1,033   
                                                ----------    ---      --------      -----       --------      --------   
Balance at December 31, 1997 (unaudited)......  16,776,056    $16      $142,008      $(273)      $(11,020)     $130,731   
                                                ==========    ===      ========      =====       ========      ========   

See accompanying notes to financial statements. 
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AMERICAN ITALIAN PASTA COMPANY

STATEMENTS OF CASH FLOWS

                                                        [Enlarge/Download Table]

                                                          NINE MONTHS                   THREE MONTHS ENDED 
                                            YEAR ENDED       ENDED        YEAR ENDED       DECEMBER 31,    
                                           DECEMBER 31,  SEPTEMBER 30,   SEPTEMBER 30,  -------------------
                                               1995          1996            1997         1996       1997  
                                           ------------  -------------   -------------  --------   --------
                                                                                            (UNAUDITED)    
                                                                    (IN THOUSANDS)                         
                                                                                                           
Operating activities:                                                                                      
Net income (loss)........................    $    476      $ (4,198)       $  5,057     $   432    $ 1,033 
Adjustments to reconcile net income                                                                        
  (loss) to net cash provided by (used                                                                     
  in) operations:                                                                                          
  Depreciation and amortization..........       6,279         5,434           7,828       1,787      1,868 
  Deferred income tax expense                                                                              
     (benefit)...........................         264        (1,556)          2,989          --      1,194 
  Extraordinary loss due to early                                                                          
     extinguishment of long-term debt....          --         1,647              --          --      2,332 
  Loss on disposal of property, plant and                                                                  
     equipment...........................         439            --              --          --         -- 
  Changes in operating assets and                                                                          
     liabilities.........................                                                                  
  Trade and other receivables............      (4,586)       (1,785)          3,347       2,955     (3,619)
  Prepaid expenses and deposits..........        (364)         (952)            464          42     (1,250)
  Inventory..............................      (2,814)       (1,830)          1,086         233     (1,607)
  Accounts payable and accrued                                                                             
     expenses............................       6,610        (3,961)          2,792      (2,104)     3,041 
  Other..................................        (574)         (276)           (492)       (881)       299 
                                             --------      --------        --------     -------    ------- 
Net cash provided by (used in) operating                                                                   
  activities.............................       5,730        (7,477)         23,071       2,464      3,291 
Investing activities:                                                                                      
  Additions to property, plant and                                                                         
     equipment...........................     (38,789)       (3,041)        (28,428)       (829)   (26,302)
                                             --------      --------        --------     -------    ------- 
Net cash used in investing activities....     (38,789)       (3,041)        (28,428)       (829)   (26,302)
Financing activities:                                                                                      
  Additions to deferred debt issuance                                                                      
     costs...............................         (71)       (2,083)         (2,115)         --       (325)
  Proceeds from issuance of debt.........      40,795        86,470          11,730         320     21,763 
  Net borrowings under revolving line of                                                                   
     credit facility.....................          --        13,500          (5,500)     (2,000)        -- 
  Principal payments on debt and capital                                                                   
     lease obligations...................      (7,848)      (85,669)        (19,810)        (95)   (86,178)
  Proceeds from issuance of common stock,                                                                  
     net of issuance costs...............         190           100          21,958          --     86,714 
                                             --------      --------        --------     -------    ------- 
Net cash provided by (used in) financing                                                                   
  activities.............................      33,066        12,318           6,263      (1,775)    21,974 
                                             --------      --------        --------     -------    ------- 
Net increase (decrease) in cash and                                                                        
  temporary investments..................           7         1,800             906        (140)    (1,037)
Cash and temporary investments at                                                                          
  beginning of period....................          11            18           1,818       1,818      2,724 
                                             --------      --------        --------     -------    ------- 
Cash and temporary investments at end of                                                                   
  period.................................    $     18      $  1,818        $  2,724     $ 1,678    $ 1,687 
                                             ========      ========        ========     =======    ======= 

See accompanying notes to financial statements. 
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AMERICAN ITALIAN PASTA COMPANY

NOTES TO FINANCIAL STATEMENTS 
SEPTEMBER 30, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

NATURE OF BUSINESS                                                              

American Italian Pasta Company (the Company) is a Delaware Corporation
which began operations in 1988. The Company is the third largest producer and   
marketer of pasta products in the United States with manufacturing and          
distribution facilities located in Excelsior Springs, Missouri and Columbia,    
South Carolina.                                                                 

CHANGE IN FISCAL YEAR                                                           

     Effective for its 1996 fiscal year, the Company changed its fiscal year end
from December 31 to the last Friday of September or the first Friday of October.
This change resulted in a nine-month fiscal period for 1996, a 53-week year for 
fiscal 1997, and a 52- or 53-week year for all subsequent fiscal years. The     
Company's other fiscal quarters end on the Friday last preceding December 31,   
March 31 and June 30 or the first Friday of the following month of each quarter.
For purposes of the financial statements and notes thereto, the 1997 fiscal year
is described as having ended on September 30, 1997.                             

UNAUDITED FINANCIAL INFORMATION                                                 

    The Company has included information for the twelve months ended September
30, 1996 in the statements of operations for comparative purposes. This         
information is unaudited. In addition, the financial information as of December 
31, 1997 and for the three-month periods ended December 31, 1996 and 1997 is    
unaudited. The Company believes that such information includes all adjustments  
(consisting only of normal recurring adjustments) necessary to present fairly   
the financial position, results of operations and cash flows.                   

REVENUE RECOGNITION                                                             

  Sales of the Company's products, including pricing terms, are final upon
shipment of the goods. Accordingly, revenue is recognized at such time.         

USE OF ESTIMATES                                                                

The preparation of financial statements in conformity with generally  
accepted accounting principles requires management to make estimates and        
assumptions that affect the amounts reported in the financial statements and    
accompanying notes. Actual results could differ from those estimates.           

RISKS AND UNCERTAINTIES                                                         

The Company grants credit to certain customers who meet the Company's 
pre-established credit requirements. Generally, the Company does not require    
collateral security when trade credit is granted to customers. Credit losses are
provided for in the financial statements and consistently have been within      
management's expectations. The allowance for doubtful accounts at September 30, 
1996 and 1997 was $60,000 and $196,000, respectively. At September 30, 1996 and 
1997, approximately 34% and 37%, respectively, of accounts receivable were due  
from two customers.                                                             

    Pasta is made from semolina milled from durum wheat, a class of hard amber
wheat grown in certain parts of the world and purchased by the Company from     
United States and Canadian sources. The Company mills the wheat into semolina at
its Excelsior Springs plant. Durum wheat is a narrowly traded, cash only        
commodity crop. The Company attempts to minimize the effect of durum wheat cost 
fluctuations through forward purchase contracts and raw material cost-based     
pricing agreements with many of its customers. The Company's commodity          
procurement and pricing practices are intended to reduce the risk of durum wheat
cost                                                                            
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AMERICAN ITALIAN PASTA COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)                    
increases on profitability, but also may temporarily affect the timing of the   
Company's ability to benefit from possible durum wheat cost decreases for such  
contracted quantities.                                                          

FINANCIAL INSTRUMENTS                                                           

   The carrying value of the Company's financial instruments, including cash
and temporary investments, accounts receivable, accounts payable and long-term  
debt, as reported in the accompanying balance sheet at September 30, 1997,      
approximates fair value.                                                        

ADVERTISING COSTS                                                               

    The Company amortizes direct response advertising costs over the period in
which the future benefits are expected (generally six months or less). Other    
costs of advertising and promotions are expensed as incurred.                   

CASH AND TEMPORARY INVESTMENTS                                                  

     Cash and temporary investments include cash on hand, amounts due from banks
and highly liquid marketable securities with maturities of three months or less 
at the date of purchase.                                                        

INVENTORIES                                                                     

Inventories are stated using product specific standard costs which    
approximate the lower of cost or market determined on a first-in, first-out     
(FIFO) basis. Inventories consist of the following:                             

                                                                [Download Table]

                                                 SEPTEMBER 30,    SEPTEMBER 30,
                                                     1996             1997     
                                                 -------------    -------------
                                                         (IN THOUSANDS)        
                                                                               
Finished goods...............................       $10,809          $ 9,310   
Raw materials, packaging materials and                                         
  work-in process............................         3,565            4,365   
                                                    -------          -------   
                                                    $14,374          $13,675   
                                                    =======          =======   

PROPERTY, PLANT AND EQUIPMENT                                                   

Capital additions, improvements and major renewals are classified as  
property, plant and equipment and are recorded at cost. Depreciation is         
calculated for financial statement purposes using the straight-line method over 
the estimated useful life of the related asset for each year as follows:        

                                                                [Download Table]

                                                                NUMBER OF
                                                                  YEARS  
                                                                ---------
                                                                         
Land improvements...........................................       40    
Buildings...................................................       30    
Plant and mill equipment....................................       20    
Packaging equipment.........................................       10    
Furniture, fixtures and equipment...........................        5    

     The Company capitalizes interest costs associated with the construction and
installation of plant and equipment. During the fiscal year ended December 31,  
1995, approximately $1,559,000 of interest cost was capitalized. There was no   
interest cost capitalized in fiscal 1996. During the year ended September 30,   
1997, approximately $488,000 of interest cost was capitalized.                  

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AMERICAN ITALIAN PASTA COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)                    
OTHER ASSETS                                                                    

Other assets consist of the following:                                

                                                        [Enlarge/Download Table]

                                                             SEPTEMBER 30,   SEPTEMBER 30,
                                                                 1996            1997     
                                                             -------------   -------------
                                                                    (IN THOUSANDS)        
                                                                                          
Debt issuance costs (Note 2)................................    $2,143          $4,258    
Package design costs........................................     1,456           1,598    
Other.......................................................     1,150           1,702    
                                                                ------          ------    
                                                                 4,749           7,558    
Accumulated amortization....................................    (2,127)         (2,983)   
                                                                ------          ------    
                                                                $2,622          $4,575    
                                                                ======          ======    

Debt issuance costs relate to expenditures incurred in connection with
obtaining long-term debt. These costs are being amortized over the life of the  
related debt using the effective interest rate method. Debt issuance costs, net 
of accumulated amortization, were $3,436,000 at September 30, 1997.             

 Package design costs relate to certain incremental third party costs to
design artwork and produce die plates and negatives necessary to manufacture and
print packaging materials according to the Company's and customer's             
specification. These costs are amortized ratably over a two-year period. In the 
event that product packaging is discontinued prior to the end of the            
amortization period, the respective package design costs are written off.       
Package design costs, net of accumulated amortization, were $378,000 at         
September 30, 1997.                                                             

INCOME TAXES                                                                    

The Company accounts for income taxes in accordance with the method   
prescribed by Statement of Financial Accounting Standards (SFAS) No. 109,       
"Accounting for Income Taxes." Under this method, deferred tax assets and       
liabilities are determined based on differences between the financial reporting 
and tax bases of assets and liabilities, and are measured using the enacted tax 
rates and laws that will be in effect when the differences are expected to      
reverse.                                                                        

STOCK OPTIONS                                                                   

     The Company has elected to follow Accounting Principles Board Opinion (APB)
No. 25, "Accounting for Stock Issued to Employees," and related Interpretations 
in accounting for its employee stock options and have adopted the pro forma     
disclosure requirements under SFAS No. 123 "Accounting for Stock-Based          
Compensation." Under APB No. 25, because the exercise price of the Company's    
employee stock options is equal to or greater than the market price of the      
underlying stock on the date of grant, no compensation expense is recognized.   

2. LONG-TERM DEBT                                                               

The Company refinanced certain of its credit facilities subsequent to 
September 30, 1997 as more fully described in Note 12.                          

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NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1997

2. LONG-TERM DEBT -- (CONTINUED)                                                
   The principal maturity terms of the new $150 million unsecured, revolving
credit facility are as follows:                                                 

                                                        [Enlarge/Download Table]

                    FACILITY                          AMOUNT      SCHEDULED COMMITMENT REDUCTION
                    --------                      --------------  ------------------------------
                                                  (IN THOUSANDS)                                
                                                                                                
Scheduled Commitment Reduction...................    $ 10,000           September 30, 1999      
Scheduled Commitment Reduction...................      15,000           September 30, 2000      
Scheduled Commitment Reduction...................      25,000           September 30, 2001      
Final Maturity...................................     100,000           September 30, 2002      
                                                     --------                                   
                                                     $150,000                                   
                                                     ========                                   

   Interest is to be charged at either the base rate (higher of prime or 1/2
of 1% in excess of the federal funds effective rate) or LIBOR plus an applicable
margin based on a sliding scale of the ratio of the Company's total indebtedness
divided by earnings before interest, taxes, depreciation and amortization       
(EBITDA). In addition, a commitment fee is to be charged on the unused facility 
balance based on the sliding scale of the Company's total indebtedness divided  
by EBITDA. The stated interest plus the commitment fee will be classified as    
interest expense.                                                               

     Long-term debt, as reclassified to reflect the refinancing events described
above, consists of the following:                                               

                                                        [Enlarge/Download Table]

                                                             SEPTEMBER 30,    SEPTEMBER 30,
                                                                 1996             1997     
                                                             -------------    -------------
                                                                     (IN THOUSANDS)        
                                                                                           
Term loans..................................................   $ 94,813         $ 93,938   
Capital lease, 15-year term with three, five-year renewal                                  
  options, at an imputed interest rate of 12.5%.............      3,586            3,482   
Capital lease, eight-year term at an imputed interest rate                                 
  of 8.5%...................................................      2,260            2,054   
Other.......................................................        703            1,492   
                                                               --------         --------   
                                                                101,362          100,966   
Less current portion........................................      8,078              829   
                                                               --------         --------   
                                                               $ 93,284         $100,137   
                                                               ========         ========   

    In February 1996, the Company refinanced certain of its credit facilities.
The unamortized balance of debt issuance costs of $2.6 million which related to 
the previous debt were written off, net of related tax benefits of $1 million,  
as an extraordinary loss on debt extinguishment as required by generally        
accepted accounting principles.                                                 

   The following information related to the old revolving credit facility is
presented for the year ended December 31, 1995, the nine-month fiscal period    
ended September 30, 1996 and the year ended September 30, 1997.                 

                                                                [Download Table]

                                                        1995    1996    1997
                                                        ----    ----    ----
                                                                            
Weighted-average interest rate......................    9.0%    8.4%    8.5%

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AMERICAN ITALIAN PASTA COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1997

2. LONG-TERM DEBT -- (CONTINUED)                                                
    Annual maturities of long-term debt and capital lease obligations for each
of the next five years ended September 30, including the principal amortization 
provisions of the refinanced credit agreement, are as follows:                  

                                                                [Download Table]

                                       LONG TERM  CAPITAL LEASES          
                 YEAR                    DEBT       AND OTHER      TOTAL  
                 ----                  ---------  --------------  --------
                                                                          
1998..................................  $    --       $1,520              
1999..................................       --        1,496              
2000..................................       --        1,220              
2001..................................       --          994              
2002..................................   93,938          990              
Thereafter............................       --        5,235              
                                        -------       ------              
                                         93,938       11,455      $105,393
Less imputed interest.................       --        4,427         4,427
                                        -------       ------      --------
Present value of net minimum                                              
  payments............................   93,938        7,028       100,966
Less current portion..................       --          829           829
                                        -------       ------      --------
Long-term obligations.................  $93,938       $6,199      $100,137
                                        =======       ======      ========

  The new revolving credit agreement contain various restrictive covenants
which include, among other things, financial covenants requiring minimum and    
cumulative earnings levels and limitations on the payment of dividends, stock   
purchases, and the Company's ability to enter into certain contractual          
arrangements. The facility is unsecured.                                        

The Company leases certain assets under capital lease agreements. At  
September 30, 1996 and 1997, the cost of these assets was $7,128,000 and        
$7,949,000, respectively, and related accumulated amortization was $642,000 and 
$687,000, respectively.                                                         

3. INCOME TAXES                                                                 

     At September 30, 1997, the Company has net operating loss carryforwards for
federal income tax purposes that expire as follows:                             

                                                                [Download Table]
                                                                       
2003........................................................    $   958
2004........................................................      5,253
2005........................................................         76
2006........................................................          5
2007........................................................      1,299
2008........................................................        195
2009........................................................      1,248
2010........................................................      5,121
2011........................................................     12,584
2012........................................................         58
                                                                -------
                                                                $26,797
                                                                =======

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AMERICAN ITALIAN PASTA COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1997

3. INCOME TAXES -- (CONTINUED)                                                  
    The Company also has state income enterprise zone credits of approximately
$1 million that expire in 1997.                                                 

The Company has established a valuation allowance of approximately $1 
million for state enterprise zone credits that are available but are not        
expected to be realized. Management believes it is more likely than not that    
remaining deferred tax assets will be realized through the generation of future 
taxable income and available tax planning strategies.                           

    Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting  
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities are as follows:               

                                                        [Enlarge/Download Table]

                                                             SEPTEMBER 30,    SEPTEMBER 30,
                                                                 1996             1997     
                                                             -------------    -------------
                                                                     (IN THOUSANDS)        
                                                                                           
Deferred tax assets:                                                                       
  Net operating loss carryforward...........................    $ 9,730          $10,183   
  State enterprise zone credits.............................      1,031            1,031   
  AMT credit carryforward...................................        561              676   
  Other.....................................................      1,888              732   
                                                                -------          -------   
Total deferred tax assets...................................     13,210           12,622   
Deferred tax liabilities:                                                                  
  Book basis of tangible assets greater than tax............      6,721            9,404   
  Other.....................................................        710              428   
                                                                -------          -------   
Total deferred tax liabilities..............................      7,431            9,832   
                                                                -------          -------   
Net deferred tax assets before allowance....................      5,779            2,790   
Valuation allowance for deferred tax assets.................     (1,031)          (1,031)  
                                                                -------          -------   
Net deferred tax assets.....................................    $ 4,748          $ 1,759   
                                                                =======          =======   

  Significant components of the provision for income taxes are as follows:

                                                        [Enlarge/Download Table]

                                                                   NINE MONTHS                 
                                                     YEAR ENDED       ENDED        YEAR ENDED  
                                                    DECEMBER 31,  SEPTEMBER 30,   SEPTEMBER 30,
                                                        1995          1996            1997     
                                                    ------------  -------------   -------------
                                                                  (IN THOUSANDS)               
                                                                                               
Current income tax expense.........................     $  6         $    --         $   81    
Deferred tax expense (benefit).....................      264          (1,556)         2,989    
                                                        ----         -------         ------    
Net income tax expense (benefit)...................     $270         $(1,556)        $3,070    
                                                        ====         =======         ======    

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NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1997

3. INCOME TAXES -- (CONTINUED)                                                  
     The reconciliation of income tax computed at the U.S. statutory tax rate to
income tax expense is as follows:                                               

                                                        [Enlarge/Download Table]

                                                                   NINE MONTHS                 
                                                     YEAR ENDED       ENDED        YEAR ENDED  
                                                    DECEMBER 31,  SEPTEMBER 30,   SEPTEMBER 30,
                                                        1995          1996            1997     
                                                    ------------  -------------   -------------
                                                                  (IN THOUSANDS)               
                                                                                               
Income (loss) before income taxes..................     $746         $(4,107)        $8,127    
U.S. statutory tax rate............................     x34%            x34%           x34%    
                                                        ----         -------         ------    
Federal income tax expense (benefit) at U.S.                                                   
  statutory rate...................................      254          (1,396)         2,763    
State income tax expense(benefit), net of federal                                              
  tax effect.......................................       30            (165)           325    
Other, net.........................................      (14)              5            (18)   
                                                        ----         -------         ------    
Net income tax expense (benefit)...................     $270         $(1,556)        $3,070    
                                                        ====         =======         ======    

4. COMMITMENTS AND CONTINGENCIES                                                

   In April 1997, the Company entered into a long-term supply arrangement in
which the Company is obligated to produce and the customer is obligated to      
purchase certain minimum annual volumes of pasta products beginning in fiscal   
1998. In order to fulfill its obligations under the contract, the Company will  
be required to expand significantly its available production capacity.          

     The Company has committed approximately $86 million to expand significantly
its existing manufacturing, milling and distribution facilities. The expansion  
assets are anticipated to be placed in service during fiscal 1998. As of        
September 30, 1997, cumulative expansion expenditures are $23,721,000, including
capitalized interest of $488,000. The remaining expansion costs will be funded  
from a portion of the proceeds from the Company's common stock sale (see Note   
12), available bank credit facilities and cash provided by operations.          

 The Company had durum wheat purchase commitments totaling approximately
$8.0 million and $15.1 million at September 30, 1996 and 1997, respectively.    

Under an agreement with its predominant rail carrier, the Company is  
obligated to transport specified wheat volumes. In the event the specified      
transportation volumes are not met, the Company is required to reimburse certain
rail carrier costs. The Company is in compliance with the volume obligations at 
September 30, 1997.                                                             

5. MAJOR CUSTOMERS                                                              

  Sales to a certain customer during the year ended December 31, 1995, the
fiscal nine-months ended September 30, 1996 and the year ended September 30,    
1997 represented 33%, 27% and 27% of revenues, respectively. Sales to a second  
customer during the year ended December 31, 1995, the fiscal nine-months ended  
September 30, 1996 and the year ended September 30, 1997 represented 23%, 19%   
and 22% of revenues, respectively.                                              

6. STOCK OPTION PLAN                                                            

  In October 1992, a stock option plan was established that authorizes the
granting of options to purchase up to 1,201,880 shares of the Company's common  
stock by certain officers and key employees. In                                 

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AMERICAN ITALIAN PASTA COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1997

6. STOCK OPTION PLAN -- (CONTINUED)                                             
October 1993, an additional plan was established that authorizes the granting of
options to purchase up to 82,783 shares of the Company's common stock. The stock
options expire 10 years from the date of grant and become exercisable over the  
next five years in varying amounts depending on the terms of the individual     
option agreements.                                                              

                                                        [Enlarge/Download Table]

                                      NUMBER OF   OPTION PRICE  WEIGHTED AVERAGE             
                                       SHARES      PER SHARE     EXERCISE PRICE   EXERCISABLE
                                      ---------   ------------  ----------------  -----------
                                                                                             
Outstanding at                                                                               
  December 31, 1994..................   673,433   $ 2.33-$4.92       $ 4.06         374,447  
Exercised............................        --                                              
Granted..............................   339,562   $  12.23           $12.23                  
Canceled/Expired.....................        --                                              
                                      ---------                                              
Outstanding at                                                                               
  December 31, 1995.................. 1,012,995   $2.33-$12.23       $ 6.79         455,942  
Exercised............................        --                                              
Granted..............................     1,226   $  12.23           $12.23                  
Canceled/Expired.....................      (613)  $  12.23           $12.23                  
                                      ---------                                              
Outstanding at                                                                               
  September 30, 1996................. 1,013,608   $2.33-$12.23       $ 6.80         541,471  
Exercised............................        --                                              
Granted..............................   262,052   $7.02-$12.23       $ 8.87                  
Canceled/Expired.....................   (96,334)  $4.92-$12.23       $12.09                  
                                      ---------                                              
Outstanding at                                                                               
  September 30, 1997................. 1,179,326   $2.33-$12.23       $ 6.83       734,877    
                                      =========                                              

The following table summarizes outstanding and exercisable options at 
September 30, 1997:                                                             

                                                        [Enlarge/Download Table]

                                          OPTIONS OUTSTANDING              OPTIONS EXERCISABLE      
                                    -------------------------------  -------------------------------
                                      NUMBER       WEIGHTED AVERAGE    NUMBER       WEIGHTED AVERAGE
          EXERCISE PRICES           OUTSTANDING     EXERCISE PRICE   EXERCISABLE     EXERCISE PRICE 
          ---------------           -----------    ----------------  -----------    ----------------
                                                                                                    
$2.33-$2.38........................   226,456           $ 2.36         226,456           $ 2.36     
$4.92..............................   445,137             4.92         338,563             4.92     
$7.02..............................   169,244             7.02          57,028             7.02     
$12.23.............................   338,489            12.23         112,830            12.23     

   SFAS No. 123 requires the disclosure of pro forma net income and earnings
per share for stock-based awards as if the Company had used the fair value      
method of accounting for such awards. Under SFAS No. 123, the fair value is     
calculated through the use of option pricing models. These models require       
subjective assumptions, including future stock price volatility and expected    
time to exercise, which greatly affect the calculated values. The Company's     
calculations were made using the minimum value method with the following        
weighted-average assumptions: expected life, 18 months following vesting; no    
stock volatility; risk free interest rate of 6% and no dividends during the     
expected term. Based on these calculations and assumptions, the effect of       
applying SFAS No. 123's fair value method to the Company's stock-based awards   

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NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1997

6. STOCK OPTION PLAN -- (CONTINUED)                                             
granted subsequent to December 15, 1994 results in pro forma net income which is
not materially different from amounts reported in the accompanying statements of
operations.                                                                     

7. EMPLOYEE BENEFIT PLAN                                                        

    The Company has a defined contribution plan organized under Section 401(k)
of the Internal Revenue Code covering substantially all employees. The plan     
allows all qualifying employees to contribute up to the tax deferred            
contribution limit allowable by the Internal Revenue Service. The Company will  
match 50% of the employee contributions up to a maximum employee contribution of
6% of the employee's salary and may contribute additional amounts to the plan as
determined annually by the Board of Directors. Employer contributions related to
the plan totaled $139,000, $124,000 and $200,000 for the year ended December 31,
1995, the fiscal nine-months ended September 30, 1996 and the year ended        
September 30, 1997, respectively.                                               

8. PLANT EXPANSION COSTS                                                        

     Plant expansion costs include incremental direct and indirect manufacturing
and distribution costs which are incurred as a result of construction,          
commissioning and start-up of new capital assets. These costs are expensed as   
incurred but are unrelated to current production and, therefore, reported as a  
separate line item in the statement of operations. Plant expansion costs        
amounted to $2,065,000 for the year ended December 31, 1995.                    

9. SUPPLEMENTAL CASH FLOW INFORMATION                                           

                                                        [Enlarge/Download Table]

                                                                   NINE MONTHS                 
                                                     YEAR ENDED       ENDED        YEAR ENDED  
                                                    DECEMBER 31,  SEPTEMBER 30,   SEPTEMBER 30,
                                                        1995          1996            1997     
                                                    ------------  -------------   -------------
                                                                  (IN THOUSANDS)               
                                                                                               
Supplemental disclosure of cash flow information:                                              
Cash paid for interest.............................    $9,675        $8,101          $9,899    
                                                       ======        ======          ======    
Cash paid for income tax...........................    $  100        $   50          $   --    
                                                       ======        ======          ======    

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AMERICAN ITALIAN PASTA COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1997

10. PRODUCT INTRODUCTION COSTS                                                  

   During 1996, the Company began distribution of its Pasta LaBella flavored
pasta products into the United States' retail grocery trade. Introduction of    
these products was supported by significant advertising, promotions and other   
initiatives. The Company's selling and marketing expense includes the following 
product introduction costs:                                                     

                                                        [Enlarge/Download Table]

                                                              NINE MONTHS                  
                                                                 ENDED         YEAR ENDED  
                                                             SEPTEMBER 30,    SEPTEMBER 30,
                                                                 1996             1997     
                                                             -------------    -------------
                                                                     (IN THOUSANDS)        
                                                                                           
Introductory advertising....................................    $3,587           $  137    
In-store product demonstrations.............................       692              307    
Direct response advertising amortization....................       166              200    
Product placement fees paid.................................     3,113            1,633    
Introductory trade incentives...............................       268               --    
Other.......................................................       296              588    
                                                                ------           ------    
Total product introduction costs............................    $8,122           $2,865    
                                                                ======           ======    

There were no such costs in 1995.                                     

11. NOTES RECEIVABLE FROM OFFICERS                                              

  In April 1997, certain officers of the Company acquired 42,366 shares of
common stock. At the same time, the Company loaned these officers $298,000, all 
of which remains outstanding at September 30, 1997. The loans which were        
evidenced by promissory notes are payable in equal installments over three years
commencing upon termination of certain transfer restrictions applicable to such 
shares under the Stockholders Agreement, not later than December 31, 1998. The  
notes are collateralized by the pledge of shares of common stock of the Company,
may be prepaid in part or in full without notice or penalty and bear interest at
the applicable federal rate in effect on the first day of each quarter. These   
loans, evidenced by promissory notes, are classified as a reduction to          
stockholders equity in the accompanying balance sheet at September 30, 1997.    

12. SUBSEQUENT EVENTS                                                           

PUBLIC OFFERING OF COMMON STOCK AND RECAPITALIZATION                  

   On October 8, 1997, the Company completed an initial public offering (the
"Offering") of 7,900,000 shares of Class A Common Stock, par value of $.001 per 
share (the "New Class A Common Stock"), of which 5,310,000 shares were offered  
by the Company and 2,590,000 shares were sold by certain selling stockholders.  
The offering of 5,310,000 primary shares at $18 per share, generated $95.6      
million of gross proceeds. Net proceeds of the offering were $87 million, after 
deducting the expenses of the offering. The Company used the proceeds of the    
offering to pay down the Company's outstanding debt. Prior to consummation of   
the Offering, the Company amended and restated its Charter and By-Laws and      
effected a recapitalization such that (i) the common equity of the Company      
consists of New Class A Common Stock and Class B Convertible Common Stock, par  
value $.001 per share (the "New Class B Common Stock") and (ii) each            
previously-outstanding share of common stock of the Company was converted into  
6.132043 shares of New Class A Common Stock. All share and per share data       
included in the financial statements and accompanying footnotes have been       
restated to reflect the recapitalization of New Class A Common Stock. Shares of 
New Class A Common Stock held by persons other than private equity funds        
sponsored by Morgan                                                             

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AMERICAN ITALIAN PASTA COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1997

12. SUBSEQUENT EVENTS -- (CONTINUED)                                            
Stanley Dean Witter & Co. (the "Morgan Stanley Stockholders") and certain       
related persons are not convertible into New Class B Common Stock. Holders of   
New Class B Common Stock will have no right to vote on matters submitted to a   
vote of stockholders, except in certain circumstances. Shares of the New Class B
Common Stock have no preemptive or other subscription rights and are convertible
into an equal number of shares of New Class A Common Stock (1) at the option of 
the holder thereof to the extent that, following such conversion, the Morgan    
Stanley Stockholders will not, in the aggregate, own more than 49% of the       
outstanding shares of New Class A Common Stock, and (2) automatically upon the  
transfer of such shares by any Morgan Stanley Stockholder to any person that is 
not a Morgan Stanley Stockholder.                                               

    In connection with the recapitalization, the Company's Charter was amended
to provide that the Board of Directors is authorized, subject to certain        
limitations prescribed by law, without further stockholder approval, to issue   
from time to time up to an aggregate of 10,000,000 shares of Preferred Stock in 
one or more series and to fix or alter the designations, preferences, rights and
any qualifications, limitations or restrictions of the shares of each such      
series thereof, including the dividend rights, dividend rates, conversion       
rights, voting rights, terms of redemption (including sinking fund provisions)  
redemption price or prices, liquidation preferences and the number of shares    
constituting any series or designations of such series. The issuance of         
Preferred Stock may have the effect of delaying, deferring or preventing a      
change in control of the Company. The rights, preferences and privileges of     
holders of Common Stock are subject to, and may be adversely affected by, the   
rights of the holders of shares of any series of Preferred Stock which the      
Company may designate and issue in the future. The Company has no present plans 
to issue any shares of Preferred Stock.                                         

1997 EQUITY INCENTIVE PLAN                                            

   In October 1997, the Board of Directors adopted the 1997 Equity Incentive
Plan for all employees. Under the Plan, the Board or a committee designated by  
the Board is authorized to grant nonqualified stock options, incentive stock    
options, reload options, stock appreciation rights, shares of restricted Common 
Stock, performance shares, performance units and shares of Common Stock awarded 
as a bonus. There are 2,000,000 shares of Common Stock reserved for issuance    
under the Plan. On October 9, 1997, the Board of Directors granted options to   
purchase 993,391 shares of common stock at $18 per share. The stock options     
expire 10 years from the date of grant and become exercisable over the next five
years in varying amounts depending on the terms of the individual option        
agreements.                                                                     

REVOLVING CREDIT FACILITY                                             

   On October 17, 1997, the Company completed a restructuring of its primary
bank credit facility. The restructured facility initially provides the Company  
with $150 million in credit on an unsecured, revolving basis at interest rates  
which are 250 basis points lower than the previous agreement. As a result of the
restructuring the Company anticipates a first quarter extraordinary charge of   
approximately $2.3 million, net of tax, related to the write off of current and 
deferred debt issuance costs.                                                   

The current and noncurrent portions of long-term debt outstanding at  
September 30, 1997 have been reclassified in the Company's balance sheet to     
reflect the scheduled maturities of the new debt. The terms of the new debt are 
described more fully in Note 2.                                                 

13. NET INCOME (LOSS) PER COMMON SHARE                                          

    The Company adopted SFAS No. 128 "Earnings Per Share" in its first quarter
ended on December 31, 1997. SFAS No. 128 replaced the former reporting of       
primary and fully diluted earnings per share with its required reporting of     
basic and diluted earnings per share. Under the new requirements, the dilutive  
effect of                                                                       
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AMERICAN ITALIAN PASTA COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1997

13. NET INCOME (LOSS) PER COMMON SHARE -- (CONTINUED)                           
stock options is excluded from basic earnings per share but included in the     
computation of diluted earnings per share. All earnings per share amounts for   
all periods have been presented, and where necessary, restated to conform to the
SFAS No. 128 requirements.                                                      

  Pursuant to Securities and Exchange Commission Staff Accounting Bulletin
No. 83, stock issued and common stock options granted by the Company during the 
12 months preceding the October 1997 filing date for its initial public offering
have been included in the calculation of weighted-average common and common     
equivalent shares outstanding, using the treasury stock method based on the     
initial public offering price of $18 per share, as if the stock and options were
outstanding for all periods presented.                                          

The following table sets forth the computation of the numerator and   
denominator used in the calculation of basic and diluted earnings per share:    

                                                        [Enlarge/Download Table]

                                            NINE MONTHS   TWELVE MONTHS                  THREE MONTHS ENDED 
                              YEAR ENDED       ENDED          ENDED        YEAR ENDED       DECEMBER 31,    
                             DECEMBER 31,  SEPTEMBER 30,  SEPTEMBER 30,   SEPTEMBER 30,  -------------------
                                 1995          1996           1996            1997         1996       1997  
                             ------------  -------------  -------------   -------------  --------   --------
                                                           (UNAUDITED)                       (UNAUDITED)    
                                                             (IN THOUSANDS)                                 
                                                                                                            
Numerator:                                                                                                  
  Income (loss) before                                                                                      
     extraordinary item.....   $   476        $(2,551)       $(1,843)        $ 5,057     $   432    $ 3,365 
  Extraordinary item:                                                                                       
     Loss due to early                                                                                      
       extinguishment of                                                                                    
       long-term debt, net                                                                                  
       of income taxes......        --         (1,647)        (1,647)             --          --     (2,332)
                               -------        -------        -------         -------     -------    ------- 
Numerator for basic and                                                                                     
  diluted earnings per                                                                                      
  share.....................   $   476        $(4,198)       $(3,490)        $ 5,057     $   432    $ 1,033 
                               =======        =======        =======         =======     =======    ======= 
Denominator:                                                                                                
  Denominator for basic                                                                                     
     earnings per share --                                                                                  
     weighted average                                                                                       
     shares.................    10,195         10,223         10,219          11,466      10,230     16,430 
Effect of dilutive                                                                                          
  securities:                                                                                               
  Employee stock options....       238             --             --             653         250      1,025 
                               -------        -------        -------         -------     -------    ------- 
Dilutive potential common                                                                                   
  shares....................       238             --             --             653         250      1,025 
                               -------        -------        -------         -------     -------    ------- 
Denominator for diluted                                                                                     
  earnings per share --                                                                                     
  adjusted weighted average                                                                                 
  shares....................    10,433         10,223         10,219          12,119      10,480     17,455 
                               =======        =======        =======         =======     =======    ======= 

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AIPC'S PASTA PRODUCTION FACILITIES

PICTURE                            PICTURE      

*Muellers(R) is a registered trademark of Bestfoods                             

   Picture                         Picture

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AIPC LOGO 

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PROSPECTUS                                                                      

5,400,000 Shares
                                                                       AIPC LOGO
American Italian Pasta Company
CLASS A COMMON STOCK

------------------------
OF THE 5,400,000 SHARES OF CLASS A COMMON STOCK BEING OFFERED HEREBY, 1,000,000 
SHARES ARE BEING SOLD BY THE COMPANY AND 4,400,000 SHARES ARE BEING SOLD BY THE 
SELLING STOCKHOLDERS. SEE "PRINCIPAL AND SELLING STOCKHOLDERS." THE COMPANY WILL
NOT RECEIVE ANY OF THE PROCEEDS FROM THE SALE OF SHARES OF CLASS A COMMON STOCK 
BY SUCH SELLING STOCKHOLDERS. OF THE 5,400,000 SHARES OF CLASS A COMMON STOCK 
BEING OFFERED HEREBY, 1,080,000 SHARES ARE BEING OFFERED INITIALLY OUTSIDE THE
UNITED STATES AND CANADA BY THE INTERNATIONAL UNDERWRITERS AND 4,320,000 SHARES 
ARE BEING OFFERED INITIALLY IN THE UNITED STATES AND CANADA BY THE U.S. 
UNDERWRITERS. SEE "UNDERWRITERS." THE CLASS A COMMON STOCK OF THE COMPANY IS
LISTED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL "PLB." ON APRIL 30, 1998,
THE REPORTED LAST SALE PRICE OF THE CLASS A COMMON STOCK ON THE NEW YORK STOCK
EXCHANGE COMPOSITE TRANSACTIONS TAPE WAS $31 PER SHARE. 

------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES 
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. 

------------------------

PRICE $30 A SHARE 
------------------------

                                                        [Enlarge/Download Table]

                                        Underwriting                                   
                           Price to     Discounts and  Proceeds to  Proceeds to Selling
                            Public     Commissions(1)  Company(2)      Stockholders    
                           --------    --------------  -----------  -------------------
                                                                                       
Per Share...............    $30.00         $1.387        $28.613          $28.613      
Total(3)................ $162,000,000    $7,489,800    $28,613,000     $125,897,200    

------------                                                                    

(1) The Company and the Selling Stockholders have agreed to indemnify the       
 Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriters."                 

(2) Before deducting expenses payable by the Company estimated at $710,000. See 
"Underwriters" for additional information relating to the payment of    
expenses in connection with the Offering.                               

(3) Certain Selling Stockholders have granted to the U.S. Underwriters an       
   option, exercisable within 30 days of the date hereof, to purchase up to an
   aggregate of 810,000 additional Shares of Class A Common Stock at the price
 to public less underwriting discounts and commissions, for the purpose of
covering over-allotments, if any. If the U.S. Underwriters exercise such
option in full, the total price to public, underwriting discounts and   
commissions and proceeds to selling stockholders will be $186,300,000,  
   $8,613,270 and $149,073,730, respectively. The Company will not receive any
proceeds from the sale of Shares of Class A Common Stock by the Selling 
  Stockholders. See "Principal and Selling Stockholders" and "Underwriters."

------------------------

The Shares of Class A Common Stock are offered, subject to prior sale,
when, as and if accepted by the Underwriters named herein and subject to        
approval of certain legal matters by Davis Polk & Wardwell, counsel for the     
Underwriters. It is expected that delivery of the Shares of Class A Common Stock
will be made on or about May 6, 1998 at the office of Morgan Stanley & Co.      
Incorporated, New York, N.Y., against payment therefor in immediately available 
funds.                                                                          
------------------------

MORGAN STANLEY DEAN WITTER                                                      
BT ALEX. BROWN INTERNATIONAL                            

GOLDMAN SACHS INTERNATIONAL   

                  GEORGE K. BAUM & COMPANY
April 30, 1998                                                                  

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B1’ Filing		Date		First		Last			Other Filings
		12/31/06		40
		6/30/06		40					4,  8-K,  NT 10-Q
		9/30/02		50		80
		9/30/01		80
		10/15/00		51
		9/30/00		80
		6/30/00		40					10-Q
		12/31/99		64		66			10-Q,  DEF 14A
		9/30/99		80
		12/31/98		51		86			DEF 14A
		10/1/98		39
		7/1/98		6		42
		5/6/98		1		91
Filed on:		5/1/98
		4/30/98		1		91
		4/6/98		72
		4/3/98		7		24			10-Q
		3/31/98		7		57
		2/25/98		48
		2/23/98		38
		1/22/98		12		39
		1/1/98		48
		12/31/97		5		87			10-K405
		12/29/97		18
		10/27/97		72
		10/17/97		32		87
		10/15/97		50		51
		10/9/97		18		87			424B4
		10/8/97		51		86			S-1/A
		10/7/97		53
		9/30/97		10		88
		6/30/97		37		72
		3/31/97		7		25
		12/31/96		10		77
		10/1/96		49
		9/30/96		10		85
		1/1/96		51		57
		12/31/95		10		85
		9/30/95		22		30
		12/31/94		10		84
		12/15/94		85
		12/31/93		10		20
		12/8/93		52
		10/30/92		51
		10/29/92		52
		1/1/92		54
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