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SEC inquiry, $60.7M charge pummel AIPC stock

August 16, 2005
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American Italian Pasta Co.''s stock price fell as much as 37 percent Wednesday, August 10, the day after the company announced a $60.7 million charge and a Securities and Exchange Commission inquiry, reports. The Kansas City-based said in a written release that the SEC is investigating it for various unspecified financial restatements and for transactions of the company''s stock by outsiders in late 2004 and early 2005, for which the company has received inquiries from the New York Stock Exchange and the Philadelphia Stock Exchange. The company''s stock closed Wednesday at $13.28, down $7.66, or 36.6 percent, on volume of 4.7 million shares. The $60.7 million charge includes $35.1 million for impairment of certain brands and trademarks due to declining sales; $1.6 million for impairment of durable assets; $5.2 million for low- and reduced-carbohydrate inventory write-downs; and $18.8 million for other financial statement adjustments. The company said it expects the charge to cause it to post a "significant" loss for the quarter, which ended July 1, and a loss for all of fiscal 2005. The company said that it also will delay its third-quarter earnings report until its
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