Aurora Foods Reports Strong On-Target Third Quarter Results, Net Sales Grow 6.6%, EBITDA Increases 6.1%

St. Louis, MO - October 23, 2001 - Aurora Foods, Inc. (NYSE:AOR), a producer and marketer of many well known and leading food brands, today announced third quarter results for the period ended September 30, 2001, which continue to reflect the significant Company turn-around that began 18 months ago.

Aurora announced that EBITDA (Earnings before interest, taxes, depreciation, and amortization) for the third quarter was on target at $46.6 million, up 6.1% versus the adjusted EBITDA in the year ago quarter. The increase in EBITDA was driven by strong topline growth, and the continued success of the Company's cost effectiveness program.

Net sales for the third quarter grew 6.6% to $242.7 million, compared with $227.7 million in the third quarter of last year. Consistent with the net sales increase, unit volume grew 7.1% versus last year. The net sales growth was broad based across most of the Company's brands and in the outlets where they are sold. In five of the seven product lines sold in traditional grocery outlets, the net sales growth ranged from 4.7% to 12.6%. Net sales also grew strongly in Non-Grocery and Foodservice, where the bulk of the business is also branded.

"We are very pleased with our results this quarter," said James T. Smith, Chairman and Chief Executive Officer of Aurora Foods. "Over the last 18 months our brands have continued to prove their inherent vitality, and the Company is now showing consistent topline growth across the breadth of its product line. The renewed health of our brands, coupled with our strong effort to drive unnecessary costs out of our operations, should produce the consistent earnings growth that was the underlying basis for the original creation of Aurora Foods."

The Company announced that its cost effectiveness program, a major component of its strategy to drive unnecessary costs out of the Company, is producing very good results. Combined manufacturing and distribution costs as a percent of gross sales were down a strong 7.5% versus the year ago quarter. Total marketing-related spending grew versus last year consistent with the Company's plan to redirect some of the cost improvement savings back into building the Company's brand equities.

The Company reported a net loss for the third quarter of $3.2 million or $0.05 per share. This compares to a year ago net loss of $15.3 million or $0.22 per share. Additionally, and very importantly, this quarter's results included a $6.4 million pre-tax non-cash charge related to an ineffective interest rate hedge that was put in place by previous Company management in 1999 as they engaged in general interest rate speculation. The hedge remains in effect until 2004. While the Company is a clear beneficiary of lower interest rates, it must recognize the future costs associated with this hedge on a current basis. As a result of recording this future cost now, future interest expense will be reduced by a like amount in subsequent quarters. Absent the non-cash hedge expense, the Company would have reported a profit in the quarter.

Mr. Smith also indicated that a number of key initiatives were underway to build on the positive results obtained to date and to accelerate the Company's progress. The most important initiative underway is the creation of a new distribution and production center at the newly purchased facility in St. Elmo, Illinois. "The start-up of our new St. Elmo distribution center is ahead of schedule," said Mr. Smith. "Our next step is to move the production of some of our brands to this facility, which is scheduled to occur in early 2002. This should reduce our per-case costs significantly, and improve our flexibility and competitiveness. As we announced previously, the purchase and conversion of St. Elmo is expected to provide annualized savings of $8.0 million, and we will begin realizing these savings early next year."

Added Mr. Smith, "We have also identified and are working on several other major opportunities that we believe can yield equally important results in the coming months. One of the most noteworthy activities underway is a new line of bigger Fresh Lender's Bagels that are being sold in 75 Wal-Mart Super Centers. We have also recently begun the sell-in of new Mrs. Paul's Shrimp Bowl meals, some of which will ship this quarter, and initial customer reaction has been very encouraging. Our greatest asset is the expandability of our brands. Our two part strategy of driving unnecessary costs out of our Company, and emphasizing topline growth on our brands, is the way we believe we can best create continued value enhancement for our shareholders and customers."

Finally, the Company reiterated that with its on-target results in the third quarter, it continues to expect full year EBITDA in the $170 million - $175 million range for 2001. Aurora will host a teleconference call to discuss third quarter 2001 results at 10:30 a.m. Eastern Time (ET) on Tuesday, October 23, 2001. The dial-in number for the call is 913-981-5571 (no password required). The call also will be available over the Internet at www.videonewswire.com. A replay of the call will be available at 719-457-0820 from 1:30 p.m. ET on Tuesday, October 23, 2001, through midnight ET on Monday, October 29, 2001. The password for the replay is 510798. The call also will be available for 30 days at www.videonewswire.com.