Aurora Foods Sales Are Steady as Economy Slows: Forum (Correct)

2001-11-12 15:36 (New York)

(Company corrects fourth paragraph of story that ran Nov. 7 to change projected Ebitda growth to 11 percent to 15 percent.)

St. Louis, Missouri, Nov. 12 (Bloomberg) -- Aurora Foods Inc.'s sales rose at the end of September and October as consumers, concerned about September's terrorist attacks and a weaker U.S. economy, ate at home more, Chief Executive Officer James Smith said.

"The economy or anything that encourages people to stay home will help sales," Smith said in a Bloomberg Forum.

Third-quarter sales volume was up more than 7 percent, and the company continues to see "very strong trends," Smith said. Aurora, which makes Mrs. Paul's seafood and Lender's Bagels, did have "a little bit of difficulty" shipping products the last week of September, Smith said. The impact of that, though, was negligible, he said.

Aurora expects earnings before interest, taxes, depreciation and amortization to increase 11 percent to 15 percent this year, Smith said. The company earned $152.7 million on that basis last year and would earn $170 million to $175 million this year.

Shares of St. Louis, Missouri-based Aurora, which also makes Duncan Hines cake mixes and Log Cabin pancake syrup, fell 5 cents to $4.93. They have more than doubled this year.

Smith initiated a number of new programs when he was named CEO last year to try to improve sales, which had lagged as Aurora failed to update some of its products, he said. For example, Lender's Bagels was losing sales as more groceries opened in-store bakeries and bagel shops such as New World Coffee-Manhattan Bagel Inc.'s Einstein Bagels opened nationally.

"We have to take these brands and make sure the products are as contemporary as possible," Smith said. Earlier this year, Aurora began selling bigger Fresh Lender's Bagels in Wal-Mart Stores Inc.'s superstores.

Aurora also is getting a boost from products including those from its Duncan Hines business, which it restructured last year by adding product-development and package-design employees and improving marketing. Over the year, the company has introduced frosting flavors such as French Vanilla, and a line of "Fun Frosters," which have Nestle candies in packets on the containers that can either be added to the frosting or eaten separately.

--Courtney Schlisserman in New York, (212) 893-4069 or cschlisserma@bloomberg.net, through the Princeton newsroom (609) 750-4500