Aurora Foods Names Chief, Revises Earnings

Aurora Foods Inc., owner of such well-known brands as Duncan Hines and Aunt Jemima, named a new chief executive and restated its earnings for 1998 and 1999 based on an investigation into its accounting practices. The company said James T. Smith, a former executive at food company ConAgra, would be CEO and president. It also named Christopher T. Sortwell, a former executive with the brewer Stroh Cos., as chief financial officer and executive vice president. The company said it has reduced its earnings by $43.3 million for the first three quarters of 1999 and reduced by $38.3 million its 1998 third- and fourth-quarter earnings. That left it with a net loss for 1999 of $4.4 million, or 7 cents a share, compared with a loss of $69.1 million, or $1.29 a share, in 1998. In February, Aurora’s chief executive, chief financial officer and two other executives resigned as the company said it would launch an investigation into its internal accounting practices, chiefly over how it accounted for payments for retail promotions. The accounting practices under investigation relate primarily to trade promotion expenses. In the last few years, Aurora has grown by acquiring well-known but weak brands and revitalizing them with marketing support, expanded distribution and new product development. It recently moved its headquarters to St. Louis from San Francisco. Aurora Foods shares rose 38 cents, or 12.5%, to $3.38 on the NYSE.