UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

                                      FORM 10-K


             [ X ]     ANNUAL REPORT  PURSUANT TO SECTION  13 OR 15(d)  OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                         For the fiscal year ended:   October 2, 1998
                                                   
                                          OR

             [   ]     TRANSITION  REPORT PURSUANT TO  SECTION 13 OR  15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                     For the transition period from           to

                          Commission file number:  001-13403


                            American Italian Pasta Company
                (Exact name of Registrant as specified in its charter)


                      Delaware                        84-1032638
               (State or other jurisdiction of        (I.R.S. Employer
              incorporation or organization)         Identification No.)


              1000 Italian Way, Excelsior Springs, Missouri       64024
                 (Address of principal executive office and Zip Code)


          Registrant's telephone number, including area code: (816) 502-6000

             Securities registered pursuant to Section 12(b) of the Act:


            Title of each class     Name of each exchange on which registered

                          Class A Convertible Common Stock:

             $.001 par value per share            New York Stock Exchange

          Securities registered pursuant to section 12(g) of the Act:  None

        <PAGE>
             Indicate  by  check mark  whether  the Registrant  has  filed all
        documents and reports required to be  filed by Section 13 or 15(d)  of
        the Securities Exchange Act of 1934 during the preceding 12 months (or
        for such shorter period that the Registrant was required to  file such
        reports), and (2) has been subject to such filing requirements for the
        past 90 days. Yes [X] No [ ]

        Indicate by check mark if  disclosure of delinquent filers pursuant to
        Item 405 of  Regulation S-K is not  contained herein, and will  not be
        contained to the best  of Registrant's knowledge, in  definitive proxy
        or information  statements incorporated by  reference in  Part III  of
        this Form 10-K or any amendment to this Form 10-K. [X]

             As  of  December 15,  1998  the  aggregate  market value  of  the
        Registrant's Class A  Convertible Common Stock held  by non-affiliates
        (using the New York Stock Exchange's closing price) was  approximately
        $376,040,369.  

             The number of shares  outstanding as of December 10, 1998  of the
        Registrant's Class A Convertible Common Stock was 18,086,775 and there
        were no shares outstanding of the Class B Common Stock.


                         DOCUMENTS INCORPORATED BY REFERENCE

             Portions of the  Registrant's Definitive Proxy Statement  for the
        1999 Annual Meeting of Stockholders are incorporated by reference into
        Part III of  this Report. The Definitive Proxy Statement will be filed
        no later than 120 days after October 2, 1998. 


        Introduction and Certain Cautionary Statements
        ----------------------------------------------

             American  Italian Pasta Company ("AIPC" or the "Company") changed
        its fiscal  year end from December 31 to  the last Friday of September
        or the first Friday of October effective beginning with the nine-month
        fiscal period ended September 27, 1996 and for all subsequent periods.
        This change resulted in a nine-month fiscal period for 1996, a 53-week
        fiscal year for 1997,  a 52-week fiscal year for 1998, 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 or the  first Friday of  the following month of  each
        quarter. For purposes of this Annual Report on Form 10-K (this "Annual
        Report"), the 1998 and 1997 fiscal years are described as having ended
        on September 30  and the 1996  fiscal year is  described as the  nine-
        month fiscal period ended September 30, 1996.

             The discussion set forth below, as well as other portions of this
        Annual Report, contains statements concerning potential future events.
        Such  forward-looking statements  are based  upon  assumptions by  the
        Company's management, as of the  date of this Annual Report, 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 the Company's Current  Report on Form
        8-K dated October 29, 1997, which is hereby incorporated by reference.
        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 will  not update any forward-looking statements in this Annual
        Report to reflect future events or developments.

             The Company holds a number of federally registered and common law
        trademarks,  which are used throughout this Annual Report. The Company
        has registered the following marks  with the U.S. Patent and Trademark
        Office:  AIPC,   American  Italian   Pasta  Company,   Pasta  LaBella,
        Montalcino, Calabria and Heartland.
         
             Additionally, a  number of  federally  registered trademarks  are
        used  throughout this Annual Report that are not owned by the Company.
        Mueller's is a registered trademark of Bestfoods, Inc. (formerly known
        as  Bestfoods  International,  Inc.)  ("Bestfoods").  San Giorgio  and
        Ronzoni  are  registered  trademarks   of  Hershey  Foods  Corporation
        ("Hershey").  Prince and Creamette are registered trademarks of Borden
        Foods Holdings Corporation ("Borden").

        <PAGE>
                                        PART I

        ITEM 1.   BUSINESS.

        General
        -------

             American Italian Pasta  Company is the second largest  and one of
        the  fastest-growing producers  and marketers  of dry  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. During the fiscal year ended September 30, 1998,
        the  Company  had  revenue  of  $189.4  million  and  earnings  before
        extraordinary item of $17.6 million.

             The  Company  produces more  than  80  dry  pasta shapes  in  two
        vertically-integrated milling  and pasta  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 milling and 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  work force.
        Management  believes  that  the  South  Carolina  plant  is  the  most
        efficient pasta facility in North America in terms of productivity and
        conversion cost per pound. To meet the significant volume requirements
        of  the Bestfoods  Agreement  and support  future growth,  the Company
        completed a  capital  expenditure program  in  fiscal 1998  to  nearly
        double the  Company's  annual  pasta production  capacity  and  add  a
        highly-automated durum wheat mill to its South Carolina plant.

             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 64204,  and
        its telephone number is (816)502-6000.  The 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 Annual Report.

        Recent Developments
        -------------------

             In  1998, AIPC  completed  an  $86  million  capital  expenditure
        program  which  increased  its   current  aggregate  pasta  production
        capacity by approximately 90% from over 300 million pounds per year to
        over  600 million  pounds per  year.  The additional  capacity at  the
        Missouri facility  combined high-speed,  high-output pasta  production
        lines  with  the increased  capability  to  produce  a wide  range  of
        products,  and included a  distribution center expansion.  The capital
        expenditure program included the construction of a durum wheat mill in
        South Carolina that adjoins the  existing pasta plant facility, a 180%
        increase in the  facility's pasta production capacity, and  a doubling
        in size of the South Carolina distribution center. 

             The additional  production capacity  is used  to manufacture  and
        distribute Mueller's brand  pasta and take  advantage of other  market
        opportunities. In  the second  quarter of  fiscal  1998, AIPC  assumed
        production  of substantially all  of Bestfoods Mueller's  pasta, which
        management   estimates   will  require   a   production  capacity   of
        approximately 180-200 million pounds a year. The 175 million pounds of
        annual  minimum Bestfoods'  purchases  that  are  required  under  the
        Bestfoods  Agreement utilize approximately 60% of the Company's newly-
        added capacity.

             On June  17, 1998,  the Company's Board  of Directors  approved a
        long-term supply agreement with  Amber Milling Company, a division  of
        Harvest States  Cooperatives ("Harvest  States"), one  of the  largest
        agribusiness cooperatives in the United States.   Under the agreement,
        the  Company will  for  approximately $35  million  construct a  pasta
        production facility adjacent to Harvest States' wheat mill in Kenosha,
        Wisconsin and  Harvest  States  will supply  semolina  and  other  raw
        materials to the planned new plant.
         
             In  addition to  the  Kenosha  project,  the Company's  Board  of
        Directors  also approved  approximately  $40  million  for  additional
        expansions  in the  Columbia, South  Carolina  and Excelsior  Springs,
        Missouri  facilities.  The  Excelsior Springs expansion  will increase
        the  Company's product  range  to  include  automated  production  and
        packaging of  retail lasagna,  which the  Company currently  purchases
        externally from other  producers.  The Columbia expansion will include
        two  additional production lines and highly efficient retail packaging
        systems to  support the Company's  growth in the Retail  market.  With
        the completion of  these projects, the Company's  aggregate production
        capacities will be  the largest in North America  at approximately 800
        million pounds annually.  The  Company anticipates completion of these
        projects  in the  third quarter  of fiscal  year ending  September 30,
        1999.

        Products and Brands
        -------------------

             AIPC's  product line,  comprising over  1,500  stockkeeping 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  smaller individually-wrapped packages
        for  retail  consumers.  AIPC contracts  with  third  parties  for the
        production  of  certain  specialized pasta  shapes,  such  as stuffing
        shells and  manicotti, 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 1998, 1997 and 1996.

             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  against
        competitive  products on  physical  characteristics, including  color,
        speck count, shape and consistency, and cooking performance, including
        starch  release, protein  content and  texture;  and (ii)  competitive
        product comparisons that AIPC's customers perform on a regular basis.

             The  Company submits  its  production  facilities  to  semiannual
        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
        ("HAACP") program  in 1994  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  HAACP  standards have  helped  the  Company attract  new
        business and strengthen existing customer relationships.

             In fiscal  1995, AIPC introduced  a product line of  all natural,
        full-flavored pasta  that is marketed  under the Pasta  LaBella brand.
        Pasta LaBella  flavored  pasta is  principally marketed  as a  branded
        product  to grocery  and  other  retailers  and to  Sysco  Corporation
        ("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 in  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  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.

        Marketing and Distribution
        --------------------------

             AIPC  actively  markets  its  products  through approximately  20
        internal   sales  and   marketing  personnel   and  approximately   30
        independent  and in-house food brokers and distributors throughout the
        United States, Canada and Mexico. 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,  a
        complete  product   offering,  distinctive  packaging   marketing  and
        promotional  plans  specifically  tailored  to  the customers'  needs,
        competitive  pricing  and  superior customer  service  to  attract new
        customers and  grow existing customers'  pasta sales. The  Company has
        established   a  significant  market  presence  in  North  America  by
        developing strategic customer relationships with food industry leaders
        that have substantial pasta requirements. The Company has  a long-term
        supply  agreement  with  Sysco,  the  nation's  largest  marketer  and
        distributor  of  food service  products.  In  1998,  AIPC  became  the
        exclusive producer of Mueller's, the largest pasta brand in the United
        States,  pursuant to a recent long-term manufacturing and distribution
        agreement with 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
        8 of the  10 largest grocery retailers in the United States, including
        Wal-Mart, K-Mart, A&P, Publix, Albertsons, American  Stores, WinnDixie
        and  Ahold. AIPC  also has  long-term  supply agreements  with several
        private  label  customers.   In  addition, AIPC  has  developed supply
        relationships with leading food processors, such as Pillsbury, General
        Mills and  Kraft Foods, which use the Company's pasta as an ingredient
        in branded food products.

             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  distribution  and  supply
        management decisions regarding  pasta and new products.  The Company's
        category management experts use online ACNielsen's supermarket data to
        recommend 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.  In  addition  to
        technical education,  the Company provides dedicated technical support
        to its institutional 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
        Efficient Customer Response  ("ECR") model which uses  Electronic Data
        Interchange  ("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. 

             The  Company's  three  distribution   centers  are  strategically
        located in South  Carolina, Missouri and Southern  California to serve
        the  national  market.  Additionally, the  Company  uses  three public
        warehouses, one  in Central Florida,  one in Massachusetts and  one in
        South  Carolina.     The   Company's  South   Carolina  and   Missouri
        distribution  centers are  integrated  with  the Company's  production
        facilities manufacture cased, finished products that are 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 Company works with  its customers to
        forecast  consumer demand which allows the Company to cost-effectively
        produce inventory stocks to the forecasted demand levels.

        Pasta Production
        ----------------

             Pasta's primary ingredient  is semolina, which is  extracted from
        durum wheat through a milling process. Durum wheat is used exclusively
        for  pasta.  Durum  wheat  used  in  United  States  pasta  production
        generally originates from  Canada, North Dakota, Montana,  Arizona and
        California. 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.

             AIPC's  ability to  produce high-quality  pasta  generally begins
        with its purchasing durum wheat directly from farmers and grower-owned
        cooperatives  in North Dakota,  Montana, Arizona and  California. This
        purchasing method  ensures that  the extracted  semolina meets  AIPC's
        specifications. The Company has several sources for durum wheat and is
        not dependent on any one supplier  or sourcing area. 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.  AIPC and  Dakota Growers  Pasta
        Company ("Dakota  Growers") are the  only major producers of  pasta in
        North  America that own  vertically integrated milling  and production
        facilities.

             Durum wheat is a cash crop whose average monthly market price has
        fluctuated from  a low  of $3.82  per bushel  to a  high of  $7.49 per
        bushel in the last five years. Between December 1, 1997 and October 2,
        1998, the market  price of durum wheat decreased  by approximately 38%
        from $6.47 per bushel to  $4.00 per bushel. Until February 1998  durum
        wheat  did not  have a related  futures market  to hedge  against such
        price  fluctuations.  As of  February  12, 1998,  durum  futures began
        trading on  the Minneapolis  grain exchange.    In managements'  view,
        these   futures  contracts  have  limited  liquidity  and  other  less
        desirable features which have  precluded their use by AIPC as  a durum
        cost hedge.   The Company  manages its durum  wheat cost  risk through
        long-term  contracts and  other arrangements  with  its customers  and
        advance purchase contracts  for durum wheat  which are generally  less
        than  twelve 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 80% of
        AIPC's total revenue base. 

             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  its  most  significant  rail  carrier,  the
        Canadian Pacific  Rail System.  Under such  agreement, the Company  is
        obligated to transport specified wheat  volumes and, in the event such
        volumes  are not  met,  the  Company must  reimburse  the carrier  for
        certain of its costs. The Company currently is in compliance with such
        volume obligations. 

             The durum wheat  delivered to AIPC's mills in  Missouri and South
        Carolina is first unloaded, blended and precleaned. 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 mill where a
        single  AIPC team  member  monitors  and  directs  the  mill's  entire
        milling,  cleaning and storage process. Semolina is then pneumatically
        distributed from the  mill to  AIPC's pasta  production facilities  in
        Missouri and South Carolina.

             After being mixed  with water, the semolina is  extruded into the
        desired shapes,  travels through  computer-controlled high-temperature
        dryers,  and is stabilized  at room temperature.  The Company's entire
        pasta production  process is electronically controlled by programmable
        logic computers (PLC's) 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.

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

             The Company buys materials in quantities based on the anticipated
        future demands of its customers.

        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, Pasta  LaBella,
        Montalcino, Calabria,  Heartland and  other trademarks  with the  U.S.
        Patent and Trademark Office.  Additionally, the Company has registered
        the proprietary flavoring process for Pasta LaBella flavored pasta.

        Dependence on Major Customers
        -----------------------------

             Historically,  a limited number of customers have accounted for a
        substantial portion of the Company's revenues. During the fiscal years
        ended September  30, 1998  and 1997 and  the nine-month  fiscal period
        ended September 30, 1996, Sysco  accounted for approximately 19%,  27%
        and  27%,  respectively,  and  sales  to  Sam's  Club  accounted   for
        approximately  15%,  22%  and  19%,  respectively,  of  the  Company's
        revenues.  During  fiscal  1998,  sales  to  Bestfoods  accounted  for
        approximately 24%  of the Company's revenues.   There were no sales to
        Bestfoods  in the  prior fiscal  years.  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  1999 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,  in addition  Sysco  has renewal  options for  two
        additional   three-year  periods.   The   Company  has   a   long-term
        manufacturing and distribution agreement  with Bestfoods that requires
        Bestfoods  to  purchase a  minimum  of  175  million pounds  of  pasta
        annually for  nine years. The  Company does not have  long-term supply
        contracts with a  substantial number of its other customers, including
        Sam's  Club. Accordingly,  the  Company is  dependent  upon its  other
        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 certain food service businesses other than
        Sysco  without Sysco's prior  consent. Under the  Bestfoods Agreement,
        AIPC  may not  produce branded  retail  pasta for  Borden, Hershey  or
        Barilla Alimentare  S.p.A. ("Barilla") without Bestfoods' consent, and
        is limited  to the production of an aggregate  of 12 million pounds of
        branded pasta products annually for other producers.

             Under the  Bestfoods Agreement,  Bestfoods closed  the facilities
        dedicated to the  production of Mueller's brand pasta  and AIPC became
        the exclusive  producer of Mueller's,  with the  exception of  certain
        specialty items which are purchased from other suppliers. 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 calendar
        years. AIPC is paid on a "cost plus" basis in an amount equal to total
        actual cost  of production plus a specified  profit per pound of pasta
        produced. Bestfoods has  committed to 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. 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 name. 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 year ended September 30, 1998, sales attributed to
        Sysco represented  approximately 19%  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 two 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.  food  service businesses)  without
        Sysco's prior consent. In 1998 and 1997, Sysco  honored the Company as
        one  of its top 10 suppliers out of  its over 1,300 supplier base. The
        Sysco  Agreement  may be  terminated  by  Sysco upon  certain  events,
        including a substantial casualty to or condemnation of AIPC's Missouri
        plant.

        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. Some  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. AIPC's products compete with  a broad range of food products,
        both 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.

             The  Company's  direct  competitors include  large  multinational
        companies such as food industry leader Hershey Foods Corp. with brands
        such as San Giorgio and Ronzoni; and Borden Foods Co. with brands such
        as Prince  and Creamette;  and regional U.S.  producers of  retail and
        institutional pasta  such as  Dakota Growers  Pasta Co.,  Philadelphia
        Macaroni  Co. Inc.  and A.  Zerega's Sons,  Inc., each  an independent
        producer, and  foreign companies  such as  Italian pasta  producers De
        Cecco ("De Cecco") and Barilla. The Company also competes, indirectly,
        against  food processors  such  as Kraft  Foods, General  Mills, Inc.,
        American Home  Food Products  Corporation, Campbell  Soup Company  and
        Stouffers Corp., that  produce pasta internally  as an ingredient  for
        use in their food products.

             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 announced  their intention
        to  increase domestic  production  capacity.  In  addition  to  AIPC's
        planned  capital  expansion, management  believes that  these capacity
        additions  represent more than 150  million pounds of additional pasta
        production capacity in  aggregate.  Dakota Growers  recently increased
        the capacity  of its  durum wheat  mill and  has purchased  two former
        Borden  pasta  plants in  Minneapolis.    In September  1997,  Barilla
        announced  plans  to  build a  pasta  plant  near Ames,  Iowa  with an
        estimated annual pasta  capacity of approximately 150  million pounds.
        The plant is expected to be fully operational in early 1999. Two major
        pasta producers have  reduced their pasta production capacity.  Borden
        sold three plants  and closed two plants out of its ten North American
        pasta  plants  in  1997,  and  Bestfoods  eliminated its  capacity  of
        approximately 180  million pounds  in 1997.  Additionally, Borden  has
        announced  plans to  close a sixth  plant in  1998.  In  October 1998,
        Hershey announced that it has retained Goldman Sachs to sell its pasta
        business,  which includes eight  regional pasta brands  and production
        facilities.  If Hershey is  successful in their sale of  these assets,
        the impact, if any, by AIPC or its customers will not  be determinable
        until the successor owner business strategies are evident.  Management
        believes  AIPC  is   well  positioned  to  maintain   its  competitive
        advantages regardless of the Hershey sale outcome.

             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  benefiting  from  subsidies  from  their respective  governments.
        Effective July  1996, the U.S.  International Trade Commission  of the
        Department   of    Commerce   ("ITC"),   imposed    anti-dumping   and
        countervailing duties on Italian and Turkish imports ("the 1996  Anti-
        dumping Order"). In December 1998,  ITC announced the final results of
        its review of 1996 Anti-dumping Order for three Turkish producers. The
        ITC  indicated that  one of  the producers  had not had  any shipments
        during  the  review  period  (January  19, 1996  to  June  30,  1997),
        maintained  the anti-dumping  and  countervailing  duties for  another
        Turkish producer and repealed such  duties for the third. In addition,
        the  ITC is  conducting an  administrative  review of  its 1996  Anti-
        dumping  Order relating  to  16  Italian  pasta  producers,  including
        Barilla and De Cecco.  The ITC recently announced  that it expects  to
        complete this review by February 3,  1999.  The Company cannot predict
        the  outcome of the  ITC's review.  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.  Bulk imported  pasta,  and  pasta produced  in  the U.S.  by
        foreign firms,  are generally  not  subject to  such anti-dumping  and
        countervailing  duties. Foreign  pasta producers  generally may  avoid
        such  duties  by importing  bulk  pasta  into  the United  States  and
        repackaging it in U.S. facilities for  distribution. A leading branded
        Italian  producer,  Barilla,  opened  a  bulk  pasta  repackaging  and
        distribution facility in Syracuse, New York in 1996 and is  building a
        pasta production plant in Ames, Iowa which is expected to be completed
        in early 1999. 

        Pasta Industry and Markets
        --------------------------

             North American  pasta consumption was  approximately 5.0  billion
        pounds in  1996. 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 food service distributors
        that  supply restaurants,  hotels, schools  and hospitals, as  well as
        food processors that use pasta as a food ingredient. 

             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.

             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 planned expansion  in 1999, AIPC will have increased
        its production  capacity to over  800 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
        planned  capital expansion,  management believes  that these  capacity
        additions represent more  than 200 million pounds in aggregate. Dakota
        Growers recently  increased the capacity  of its durum wheat  mill. In
        September 1997,  Barilla announced plans  to build a pasta  plant near
        Ames, Iowa with  an estimated annual  pasta capacity of  approximately
        150  million pounds.  Two  major pasta  producers  have also  recently
        announced planned reductions in pasta production capacity. Borden sold
        three plants and closed two plants out of its ten North American pasta
        plants in 1997, and Bestfoods eliminated its capacity of approximately
        180 million pounds in 1997.

             Management estimates pasta imported from foreign producers during
        1997 represented approximately  13% 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.

             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. In 1996,
        pasta imported from Italy accounted  for approximately $140 million in
        sales,  or around  8.0% of  the  U.S. pasta  market. 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 benefiting 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.
        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.

             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 sold  21.0% of the  total pounds sold  in the
        branded Retail market  for the year ended September  30, 1998. Hershey
        announced  in  October 1998  that  it was  seeking to  sell  its pasta
        business.  Borden,  which sold 12.5% of the total pounds in the Retail
        market for the year ended September 30, 1998, has shifted 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.   During  1998,
        Bestfoods transferred substantially  all of its Mueller's  brand pasta
        production to AIPC.

             Between the Company's first fiscal quarter of 1994 and the fourth
        fiscal  quarter  of  1998,  sales  of  private  label  pasta  products
        increased from 18.6% to 21.5% of the total pounds of pasta sold in the
        Retail market based on A.C.  Nielsen scanner 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.  After Borden's
        departure from  the  private label  market,  AIPC became  the  leading
        supplier  in the remaining fragmented market. Management believes that
        the private label  category continues to offer  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.

             Customer  Markets  -  Institutional.  The  Institutional   market
        includes  both  food  service  distributors  that  supply restaurants,
        hotels, schools  and hospitals,  as well as  food processors  that use
        pasta as a food ingredient. Traditional food service customers include
        businesses and organizations, such as Sysco and US Food service, Inc.,
        that  sell products  to restaurants,  healthcare  facilities, schools,
        hotels  and industrial caterers. Most food service distributors obtain
        their supply  of pasta from  third party producers  such as  AIPC. The
        food service market  is highly-fragmented  and is  served by  numerous
        regional  and local  food distributors,  including both  "traditional"
        food  service customers  and chain  restaurant  customers. Sysco,  the
        nation's largest food service marketer and distributor of food service
        products  and one  of the  nation's largest  commercial purchasers  of
        pasta products, serves approximately 10% of the food service customers
        in the United States and has more than double the revenues of the next
        largest food service 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,  American   Home  Food   Products
        Corporation, 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
        out-sourcing 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  efficient producers such  as
        AIPC.

        Management Information Systems
        ------------------------------

             The  Company's  production,  distribution,  sales  and  marketing
        operations  are  supported  by an  IBM  AS400-based  computer hardware
        system.  The  hardware  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
        management information  systems were recently upgraded in anticipation
        of the Company's  growth and desire to continue to offer its customers
        value-added,  efficient services, and  the need  to become  "Year 2000
        Compliant". The Company has invested substantial amounts in electronic
        data interchange and efficient consumer response systems to streamline
        the   order,  invoicing  and  inventory  management  functions.    The
        discussion under  Year 2000  set forth under Item 7 is incorporated by
        reference herein. 

        Government Regulation; Environmental Matters
        --------------------------------------------

             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 September  30, 1998,  the Company  employed  360 full-time
        persons,  of whom  120 were  salaried  employees and  240 were  hourly
        employees. As  of September 30,  1997, the Company employed  289 full-
        time persons, of whom 130 were salaried employees  and 159 were hourly
        employees. The  Company's employees are  not represented by  any labor
        unions. AIPC considers its employee relations to be good.


        ITEM 2.   PROPERTIES.

             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 September 30,
        1998,  the  Company's  facilities  had  combined  annual  milling  and
        production  capacity  of  approximately 600  million  pounds  of durum
        semolina and 620 million pounds of pasta.

             During  fiscal  1998, the  Company's capital  expenditure program
        increased AIPC's current pasta production capacity by  nearly 90% from
        330 million pounds  per year to  620 million pounds  per year. At  the
        Company's Missouri facility, the Company added high-speed, high-output
        pasta production lines with the increased capability to produce a full
        range of products  and expanded the  distribution center. The  capital
        expenditures  program included the construction of  a durum wheat mill
        in South Carolina  which adjoins the existing pasta  plant facility, a
        180%  increase  in the  facility's  pasta production  capacity,  and a
        doubling of the South Carolina distribution center capacity.

             The  additional  capacity  is  used  to  produce  and  distribute
        Mueller's   brand   pasta   and  take   advantage   of   other  market
        opportunities. The  175 million  pounds of  Bestfoods' annual  minimum
        purchases  that are  required under  the  Bestfoods Agreement  utilize
        approximately  60%  of  the  Company's  newly-added  pasta  production
        capacity.

             AIPC's  1999  capital  expenditure program  will  increase AIPC's
        current pasta production capacity from  620 million pounds per year to
        over 800 million pounds per year.  At the Company's Missouri facility,
        the  Company  will  expand  its  product range  to  include  automated
        production  and packaging of lasagna.   Additionally, the Company will
        be adding two  production lines and highly efficient  retail packaging
        systems  to the  South Carolina  facility.   The  capital expenditures
        program also includes the construction  of a pasta production facility
        which  adjoins  a  Harvest  States'  owned  wheat   mill  in  Kenosha,
        Wisconsin.

             Distribution Centers. The Company currently owns the distribution
        center adjoining its  Missouri plant and leases under  a capital lease
        its  distribution centers in South Carolina.  In addition, the Company
        leases space in  three public warehouses, one in  Southern California,
        one in Central Florida and one in Northern South Carolina. 

        ITEM 3.   LEGAL PROCEEDINGS.

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

        ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

             The Company did not submit any matters to its stockholders during
        the fourth quarter of the Company's most recent fiscal year.


        EXECUTIVE OFFICERS OF THE REGISTRANT

             Pursuant to General Instruction G(3) of Form 10-K and instruction
        3 to paragraph (b) of Item  401 of Regulation S-K, the following  list
        is included as an  unnumbered Item in Part I of  this Annual Report in
        lieu of being included in AIPC's Definitive Proxy Statement which will
        be  filed  no  later  than 120  days  after  September  30, 1998.  All
        executive officers are elected annually and serve at the discretion of
        the  Board  of  Directors.  Certain  of the  executive  officers  have
        employment agreements with the Company.

             The  following table  sets forth  certain  information concerning
        each  of the  executive officers  of the  Company as of  September 30,
        1998.

        NAME                          AGE         POSITION
        ----                          ---         --------
        Horst W. Schroeder.......     57        Chairman of the Board 
                                                of Directors

        Timothy S. Webster.......     36        President and 
                                                Chief Executive Officer;
                                                Director

        Norman F. Abreo..........     48        Executive Vice President--
                                                Operations

        David E. Watson..........     43        Executive Vice President --
                                                Operations Support and
                                                Technology

        David B. Potter..........     39        Executive Vice President and 
                                                General Manager  --  Industrial
                                                Markets

        Jerry H. Dear..........       51        Senior Vice President-Retail
                                                Markets

             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  was a  manager of  PSF
        Holdings, L.L.C. and served  as Chairman of  the Board of its  wholly-
        owned  subsidiary,  Premium   Standard  Farms,  Inc.,   a  vertically-
        integrated pork producer, from 1996 to May 1998.

             Timothy S. Webster  has served as President of  the Company since
        June 1991,  as President  and Chief Executive  Officer of  the Company
        since May 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. 

             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. He
        was promoted  to Executive  Vice President -   Operations Support  and
        Technology in July 1998.   Prior to joining AIPC, Mr.  Watson spent 18
        years with the accounting firm of Arthur Andersen & Co., most recently
        as partner-in-charge of its Kansas City and  Omaha Business Consulting
        Group practice. Mr. Watson is a certified public accountant.

             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. He was promoted to Executive Vice
        President and  General  Manager    Industrial  Markets in  July  1998.
        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  joined  the   Company  in  1993  as  a  Business
        Development Manager.   He was named Vice  President - Retail Sales  in
        1995  and Senior  Vice President  - Retail  Markets in  February 1998.
        Before joining the Company, Mr. Dear had worked at Pillsbury from 1983
        to 1993, most recently as a Region Business Manager.

             There are no arrangements or understandings between the executive
        officers and any other person  pursuant to which the executive officer
        was or  is to be selected  as an officer,  except with respect  to the
        executive  officers who have entered into employment agreements, which
        agreements  designate  the position(s)  to  be held  by  the executive
        officer.

             None of the above officers are related to one another by family.


                                       PART II


        ITEM 5.   MARKET   FOR   REGISTRANT'S   COMMON   EQUITY  AND   RELATED
        STOCKHOLDER MATTERS.

             The Company's Class  A Convertible Common Stock, par value $0.001
        per share (the "Class A common stock") is traded on the New York Stock
        Exchange  under the  symbol "PLB".  Trading of  the Company's  Class A
        common stock began October 9, 1997.

             The range  of the high and low prices  per share of the Company's
        common stock for fiscal 1998;

                                               Year Ended
                                           September 30, 1998
                                              High     Low
                                              ----     ---

             First Quarter                 $26.00    $19.25
             Second Quarter                $37.25    $23.25
             Third Quarter                 $38.75    $30.00
             Fourth Quarter                $39.50    $24.625

             As of  December 16, 1998, there were  approximately 5,360 holders
        of the  Company's Class A  common stock.   No shares of  the Company's
        Class  B Convertible  Common Stock,  par value  $0.001 per  share (the
        "Class B common stock" and together with the Class A common stock, the
        "Common Stock") are outstanding on the date of this Annual Report.

             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 current credit  facility contain
        certain   provisions  which   effectively  prohibit  the   payment  of
        dividends. Future borrowing agreements of the Company may also contain
        limitations  on 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.  The  Company has  no restricted
        retained earnings at September 30, 1998.

        Securities Sold in Unregistered Offerings during Fiscal Year 1998
        -----------------------------------------------------------------

             None.


        ITEM 6.   SELECTED FINANCIAL DATA.

             The selected statement  of operations data  for the fiscal  years
        ended September 30, 1998 and  1997, the nine-month fiscal period ended
        September  30,  1996,  and  the  selected balance  sheet  data  as  of
        September 30, 1998 and 1997  are derived from the Financial Statements
        including the Notes  thereto of the Company  audited by Ernst &  Young
        LLP,  independent auditors, appearing elsewhere in this Annual Report.
        The selected statement of operations data for the years ended December
        31, 1995 and  1994 and the selected balance sheet data as of September
        30, 1996, December 31,  1995 and 1994 have been derived from financial
        statements of the Company not included herein, which have been audited
        by  Ernst & Young  LLP. The selected statement  of operations data for
        the calendar year ended December  31, 1996 and the twelve-month period
        ended September 30, 1996 and the balance sheet data as of December 31,
        1996 have been derived from the Company's unaudited internal 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  results  of  operations and  financial
        position  of the  Company. The  statement  of operations  data of  the
        Company  for  the  calendar  year  ended December  31,  1996  and  the
        twelve-month period  ended September  30, 1996  and the  balance sheet
        data as of  December 31, 1996 are included herein  only for comparison
        purposes. The selected other data has been derived from the accounting
        records  of  the  Company  and  has not  been  audited.  The  selected
        financial and other data set forth below should be read in conjunction
        with, and is qualified  by reference to, "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  Annual  Report.  The Company  has  not  paid  any
        dividends on  its Class  A common stock  during the  periods indicated
        below.

     <PAGE>
     <TABLE>
     <CAPTION>
                                                                               NINE-MONTH
                                          FISCAL YEAR        TWELVE-MONTH    FISCAL PERIOD      CALENDAR
                                            ENDED           PERIOD ENDED        ENDED          YEAR ENDED   FISCAL YEAR ENDED
                                         SEPTEMBER 30,       SEPTEMBER 30,   SEPTEMBER 30,    DECEMBER 31,    DECEMBER 31,
                                       1998        1997         1996            1996(1)           1996       1995        1994
                                       ----        ----         ----            -------           ----       ----        ----
                                                             (UNAUDITED)                       (UNAUDITED)

                                                          (IN THOUSANDS, EXCEPT PER SHARE DATA)

     <S>                            <C>        <C>             <C>              <C>           <C>          <C>        <C>
     STATEMENT OF OPERATIONS DATA:
     Revenues                       $189,390   $129,143        $121,149         $92,074       $121,621     $92,903    $69,465
     Cost of  goods sold            140,110      93,467          91,230          68,555         89,704      73,851     54,393
     Plant expansion costs (2)        1,606          --              --              --             --       2,065        484
                                    -------     -------         -------          ------        -------      ------     ------    
     Gross profit                    47,674      35,676          29,919          23,519         31,917      16,987     14,588

     Selling and marketing expense,
      including product introduction
      costs (3)                      12,984      13,664          18,445          16,798         21,250       5,303      3,792
     General and administrative
      expense                         4,948       3,766           3,686           2,805          3,498       2,930      1,951
                                     ------      ------          ------          ------         ------      ------     ------
     Operating  profit               29,742      18,246           7,788           3,916          7,169       8,754      8,845
     Interest expense, net            1,539      10,119          10,770           8,023         10,575       8,008      4,975
                                    -------     -------          ------          ------         ------      ------      -----
     Income (loss) before income tax
      and extraordinary loss         28,203       8,127          (2,982)         (4,107)        (3,406)        746      3,870
     Income tax expense (benefit)    10,557       3,070          (1,139)         (1,556)        (1,288)        270      1,484
     Extraordinary loss, net of
     income tax (4)                   2,332          __           1,647           1,647          1,647          --        204
                                    -------      ------          ------          ------         ------       -----     ------
     Net income (loss)              $15,314      $5,057         ($3,490)        ($4,198)       ($3,765)      $ 476     $2,182
                                    =======      ======          ======          ======         ======      ======      =====

     Net income (loss per
      common share (Basic):
      Before extraordinary item    $   1.03     $  0.44         $ (0.18)       $  (0.25)      $  (0.20)      $0.05    $  0.23
      Extraordinary item              (0.14)         --           (0.16)          (0.16)         (0.16)         --      (0.02)
                                   --------      ------         -------         -------       --------      ------    -------
      Total                        $   0.89      $ 0.44        ($  0.34)       ($  0.41)     ($   0.36)     $ 0.05    $  0.21 
                                   ========      ======         =======         =======       ========      ======    =======
     Weighted average
      common  shares outstanding     17,223      11,466          10,219          10,223         10,475      10,445     10,401

     Net income (loss) per
      common share assuming dilution:
      Before extraordinary item    $   0.98      $ 0.42         $ (0.18)        $ (0.25)      $  (0.20)    $   0.05   $  0.23
      Extraordinary item              (0.13)         --           (0.16)          (0.16)         (0.16)         --      (0.02)
                                   --------      ------         -------         -------       --------      ------    -------
      Total                        $   0.85      $ 0.42        ($  0.34)       ($  0.41)     ($   0.36)   $   0.05    $  0.21
                                   ========      ======         =======         =======       ========      ======    =======     
     Weighted average common
      shares outstanding             17,937      12,119          10,219          10,223         10,480      10,433     10,389

     BALANCE SHEET DATA
      (AT END OF PERIOD):
     Cash and temporary 
       investments                 $  5,442     $ 2,724         $ 1,818         $ 1,818        $ 1,678    $     18    $    11
     Working capital                 23,242      12,188          (1,601)         (1,601)        (1,965)      6,632      4,830
     Total assets                   259,381     158,175         141,688         141,688        137,974     135,424     93,629
     Long-term debt, 
     less current maturities         48,519     100,137          93,284          93,284         92,143      97,452     62,375
     Stockholders'  equity          176,784      42,984          15,969          15,969         16,402      20,067     19,401


        <FN>
        <F1>  The Company adopted a  fiscal year ending on the last  Friday of
        September or the first Friday of October, effective beginning with the
        nine-month  fiscal  period  ended  September  27,  1996  and  for  all
        subsequent fiscal  periods. For purposes  of this Form 10-K,  the 1998
        and  1997 fiscal years and the 1996 nine-month fiscal period are shown
        as having ended on September 30.

        <F2>   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.

        <F3>    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
        calendar year ended December 31, 1996. There were no such costs during
        the fiscal year  ended September 30, 1998. Product  introduction costs
        were  incurred as  follows: $2.9  million  for the  fiscal year  ended
        September 30, 1997,  $8.1 million for the  nine-month and twelve-month
        periods ended  September 30, 1996,  and $9.6 million in  calendar year
        ended December 31, 1996.  

        <F4>  Represents losses due to early extinguishment of long-term debt,
        net of income tax.

        </FN>
        </TABLE>

        ITEM 7.   MANAGEMENT'S DISCUSSION AND  ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATION.

        Introduction and Certain Cautionary Statements
        ----------------------------------------------

             Management's discussion  and analysis of the  Company's financial
        condition and results of its operations  focuses on and is intended to
        clarify the  Company's results of  operations, certain changes  in its
        financial   position,  liquidity,   capital  structure   and  business
        developments  for  the  periods covered  by  the  financial statements
        included  in this  Annual Report.  This discussion  should be  read in
        conjunction with, and is qualified  by reference to, the other related
        information  including,  but  not limited  to,  the  audited financial
        statements  (including the notes thereto and the independent auditor's
        opinion  thereon), the description  of the Company's  business, all as
        set forth in this Annual Report, as well as the risk factors discussed
        in the  Company's Current  Report on Form  8-K dated October  29, 1997
        (the  "Risk Factors"), which  has been incorporated  by reference into
        this Annual Report as if it is fully set forth herein.  

             As previously noted,  the discussion set forth below,  as well as
        other portions of  this Annual Report, contains  statements concerning
        potential future events.   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  on  which the  statements  are  based 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, the  Risk Factors.   Readers are  strongly encouraged  to consider
        those factors when evaluating any such forward-looking statement.  The
        Company will not  update any forward-looking statements in this Annual
        Report to reflect future events or developments.

             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  and a 53-week year for
        fiscal 1997, a 52-week year for fiscal 1998,  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 or  the first Friday of  the following month of  each quarter.
        For purposes of this Form 10-K,  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 unaudited nine-month period
        ended September 30, 1995  and the unaudited twelve-month period  ended
        September 30, 1996 and  the calendar year ended December  31, 1996 are
        included herein only for comparison purposes. 

             For purposes of  management's discussion and analysis  of results
        of operations,  fiscal year 1997  is compared to the  unaudited twelve
        month period  ended September  30, 1996 and  the fiscal  year 1996  is
        compared to  the  unaudited nine  month period  ended September  1995.
        Although  the  comparative   periods  are  unaudited,  the   financial
        statements on  which the discussion  is based contain  all adjustments
        necessary to fairly present the  financial position of the Company and
        the results of its operations for those periods.

        Recent Events
        -------------

             On December 3,  1998, the Company's Board of  Directors adopted a
        Stockholder  Rights Plan.   The  rights  are triggered  if any  person
        becomes the  beneficial owner of 15%  or more of  the Company's Common
        Stock.  The rights are intended to protect stockholders against, among
        other  things, unsolicited  attempts to  acquire  control of  American
        Italian Pasta  Company  that do  not offer  an adequate  price to  all
        stockholders or are otherwise not in the best interests of the Company
        and its stockholders.

        AIPC and Harvest States/Amber Milling Arrangement

             On June  17, 1998,  the Company's Board  of Directors  approved a
        long-term supply agreement with  Amber Milling Company, a  division of
        Harvest States  Cooperatives ("Harvest  States"), one  of the  largest
        agribusiness  cooperatives in the United States.  Under the agreement,
        the Company  will construct  a pasta  production facility adjacent  to
        Harvest States'  wheat mill in  Kenosha, Wisconsin and  Harvest States
        will supply semolina and other raw materials to the planned new plant.
        The Company estimates that it will invest approximately $35 million in
        capital expenditures to construct the new plant.

             In addition to  the $35  million Kenosha  project, the  Company's
        Board of Directors  also approved another $40 million  to again expand
        the   Columbia,  South   Carolina  and  Excelsior   Springs,  Missouri
        facilities.     The  Excelsior  Springs  investment  will  expand  the
        Company's  product range to include automated production and packaging
        of  lasagna, products which the Company currently purchases externally
        from  other producers.    The  Columbia  investment will  include  two
        additional  production lines  and  highly efficient  retail  packaging
        systems to  support the Company's growth  in the Retail market.   With
        the  completion of these projects, the Company's production capacities
        will exceed 800  million pounds annually, making it  the largest pasta
        producer  in North  America.   The  Company anticipates  completion of
        these projects  in the third  quarter of fiscal year  ending September
        30, 1999.

        Completion of Public Offerings

             In October 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, 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 $86.7 million, after deducting the underwriting discount
        and the expenses  of the Offering.   The Company used the  proceeds of
        the Offering to reduce outstanding debt.  

             In May  1998, the Company  completed a secondary  public offering
        (the   Secondary  Offering ) of  6,210,000  shares of  Class  A Common
        Stock, par  value  of $.001  per share,  at $30  per  share, of  which
        1,000,000 shares were offered by the Company and 5,210,000 shares were
        sold by certain selling shareholders. The Secondary Offering generated
        $30 million of gross proceeds.  Net proceeds of the Secondary Offering
        were $27.8 million after deducting  the underwriting discount and  the
        expenses of the Secondary Offering.  The Company used the net proceeds
        of the Secondary  Offering to reduce outstanding debt.   In connection
        with  the Secondary  Offering,  certain executive  officers  exercised
        options to purchase and sell 239,620 shares of Class A Common 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. 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

             In October  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 indexed  to LIBOR. As  a
        result of  the restructuring,  the Company  incurred  a first  quarter
        extraordinary  charge of  approximately  $2.3  million,  net  of  tax,
        related to the write off of deferred debt issuance costs.

        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.

     <PAGE>
     <TABLE>
     <CAPTION>

                                                                                         NINE-MONTH                    
                                     FISCAL YEAR       FISCAL YEAR     TWELVE MONTH     FISCAL PERIOD       CALENDAR
                                        ENDED             ENDED         PERIOD ENDED        ENDED          YEAR ENDED
                                    SEPTEMBER 30,     SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,     DECEMBER 31,
                                        1998              1997             1996             1996              1996
                                        ----              ----             ----             ----              ----

     <S>                               <C>               <C>              <C>              <C>               <C>
     Revenues:
       Retail                           71.0%             56.7%            59.5%            60.7%             59.6%
      Institutional                     29.0              43.3             40.5             39.3              40.4
                                       -----             -----            -----            -----             ----- 
     Total Revenues                    100.0%            100.0%           100.0%           100.0%            100.0%
                                       -----             -----            -----            -----             -----
     Cost of goods sold                 74.0              72.4             75.3             74.5              73.7
                                       -----             -----            -----            -----             -----
     Gross profit before plant
      expansion costs                   26.0              27.6             24.7             25.5              26.3

      Plant expansion costs              0.8                --               --               --                --
                                       -----             -----            -----            -----             -----
     Gross profit                       25.2              27.6             24.7             25.5              26.3
     Selling and marketing expense,
      including product
      introduction costs                 6.9              10.6             15.2             18.2              17.5
     General and administrative
      expense                            2.6               2.9              3.0              3.0               2.9
                                       -----             -----            -----            -----              ----
     Operating profit                   15.7              14.1              6.5              4.2               5.9
     Interest expense, net               0.8               7.8              8.9              8.7               8.7
     Income tax expense (benefit)        5.6               2.4             (0.9)            (1.7)             (1.1)
     Extraordinary loss, net of
      income tax                         1.2                --              1.4              1.8               1.4
                                       -----             -----            -----            -----             -----
     Net income (loss)                   8.1%              3.9%            (2.9)%           (4.6)%            (3.1)%
                                       =====             =====            =====            =====              ===== 

     </TABLE>


        <PAGE>

        FISCAL YEAR  ENDED SEPTEMBER  30, 1998 COMPARED  TO FISCAL  YEAR ENDED
        SEPTEMBER 30, 1997

             REVENUES.  Revenues increased $60.2  million, or 46.7%, to $189.4
        million  for the  fiscal year  ended September  30, 1998,  from $129.1
        million  for the  fiscal year  ended September  30, 1997.  The revenue
        increase for  the fiscal year  ended September 30, 1998  was primarily
        due  to increases in unit volume  including the initiation of sales of
        Mueller's brand pasta to Bestfoods, favorable changes in sales mix and
        increases  in average  sales prices  related  to the  pass through  of
        higher durum wheat costs.   Management expects increases in revenue in
        fiscal 1999  primarily as a  result of the Company's  long-term supply
        agreement with Bestfoods and growth with existing and new accounts.

             Revenues for the Retail market increased $61.2 million, or 83.6%,
        to $134.5 million for the fiscal  year ended September 30, 1998,  from
        $73.3  million for  the fiscal  year ended  September 30,  1997.   The
        increase primarily reflects the initiation of sales of Mueller's brand
        pasta to Bestfoods and gains in private label volumes which are offset
        by lower sales volumes of Pasta LaBella flavored pasta.

             Revenues  for the Institutional market decreased $1.0 million, or
        1.8%, to $54.9  million for the fiscal year ended  September 30, 1998,
        from $55.9 million for the fiscal year ended September 30, 1997.  This
        decrease  was  primarily  a  result  of  reductions  in  opportunistic
        contract  volumes  versus  the  prior  period  due  to  high  capacity
        utilization in the current period  to support the Retail market volume
        gains.   Non-contract Institutional  market unit volumes  and revenues
        were generally consistent between periods. 

             GROSS PROFIT.  Gross Profit increased $12.0 million, or 33.6%, to
        $47.7 million for the fiscal year ended September 30, 1998, from $35.7
        million for  the fiscal year  ended September 30, 1997.  Gross profits
        increased  generally as  a  result  of the  volume  and revenue  gains
        referenced above.  Gross profit  as a percentage of revenues decreased
        to 25.2% for the  fiscal year ended September 30, 1998  from 27.6% for
        the fiscal  year ended  September 30,  1997.   The  decrease in  gross
        profit as  a percentage  of revenues relates  to the  relatively lower
        gross margin earned  on Bestfoods volumes, lower sales  volumes of the
        relatively  higher margin  Pasta  LaBella  flavored  pasta  and  plant
        expansion costs. Management expects increases in gross  profit in 1999
        as  a  result of  volume  and  related  revenue increases.    However,
        management  expects gross  profit  as  a  percentage  of  revenues  to
        decrease in fiscal 1999 versus fiscal 1998 based on anticipated higher
        Bestfoods volumes and related revenue share.

             SELLING AND  MARKETING EXPENSE.   Selling  and marketing  expense
        decreased  $0.7 million, or 5.0%, to $13.0 million for the fiscal year
        ended September 30,  1998, from $13.7 million reported  for the fiscal
        year  ended September  30, 1997.  Selling and  marketing expense  as a
        percentage of  revenues decreased  to 6.9% for  the fiscal  year ended
        September 30,  1998, from 10.6%  for the comparable prior  period. The
        decreases  are primarily  due  to product  introduction costs,  as the
        Company incurred  no product  introduction costs for  the fiscal  year
        ended September  30, 1998, compared to $2.9  million of such costs for
        the  fiscal year  ended September  30, 1997.  The decrease  in product
        introduction costs was partially offset by increases  in other selling
        and marketing expenses which are  required to support the increases in
        private label revenues.

             GENERAL AND  ADMINISTRATIVE EXPENSE.   General and administrative
        expense  increased $1.2  million, or  31.4%, to  $4.9 million  for the
        fiscal year ended  September 30, 1998, from $3.8  million reported for
        the  comparable period  last year,  but decreased  as a  percentage of
        revenues  from   2.9%  to   2.6%.    The   increase  in   general  and
        administrative  costs  primarily  relates to  increases  in  legal and
        accounting  fees,   shareholder  communication   expenses  and   other
        incremental  costs related  to the  Company's first  year as  a public
        company.
              
             OPERATING PROFIT.   Operating profit  for the  fiscal year  ended
        September 30, 1998,  was $29.7 million, an increase  of 63.0% over the
        $18.2 million reported  for the fiscal year ended  September 30, 1997.
        Operating profit  increased as a  percentage of revenues to  15.7% for
        the fiscal  year ended September 30,  1998, from 14.1% for  the fiscal
        year ended September 30, 1997.

             INTEREST EXPENSE.   Interest  expense for  the fiscal  year ended
        September 30, 1998, was $1.5  million, decreasing 84.8% from the $10.1
        million reported  for the  fiscal year ended  September 30,  1997. The
        decrease  was primarily  the result  of  reduced borrowings  under the
        Company's  credit  facility  as  a  result of  the  reduction  of  the
        Company's outstanding  debt with  the net  proceeds realized  from the
        Company's fiscal 1998 initial and secondary public offerings of common
        stock.  In addition, the Company is incurring lower effective interest
        rates  as a  result  of  the Company's  October  1997 credit  facility
        restructuring.

             INCOME TAX.  Income  tax for the fiscal year  ended September 30,
        1998, was $10.6 million, increasing $7.5 million from the $3.1 million
        reported for the fiscal year ended September 30, 1997, and reflects an
        effective income tax rate of approximately 38%.

             EXTRAORDINARY ITEM.   During the fiscal year  ended September 30,
        1998, 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 October 1997 extinguishment and restructuring of
        the Company's principal bank credit agreement.  There was no such item
        in the 1997 period.

             NET INCOME.  Net income for  the fiscal year ended September  30,
        1998, was $15.3 million, increasing from the $5.1 million reported for
        the  fiscal year  ended  September  30, 1997.  Net  income per  common
        share-assuming dilution was $0.85 in fiscal 1998 compared to $0.42 per
        share for the fiscal year ended September 30, 1997.

        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.  

             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 19.2%, 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 $4.8 million, or 25.9%, 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%, to  $3.8 million for the fiscal
        year  ended September  30, 1997,  from $3.7  million reported  for the
        comparable period last year, but decreased as a percentage of revenues
        from 3% to 2.9%.  
         
             OPERATING PROFIT.   Operating  profit for  the fiscal  year ended
        September 30, 1997, was $18.2 million, an increase of 134.3% over  the
        $7.8 million reported for the twelve-month period ended  September 30,
        1996. Excluding product introduction costs, operating profit increased
        $5.2 million,  or 32.7%, to  $21.1 million  for the fiscal  year ended
        September 30, 1997,  from $15.9 million reported  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 6.0% from the $10.8
        million  reported for  the twelve-month    period ended  September 30,
        1996.  The decrease  was primarily  the result  of  reduced borrowings
        under the  Company's 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 for the fiscal year  ended September 30,
        1997,  was  $3.1  million, increasing  $4.2  million  from the  $(1.1)
        million reported 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 fiscal year ended September 30, 1997.

             NET INCOME.  Net income for  the fiscal year ended September  30,
        1997, was $5.1  million, increasing from  the $(3.5) million  reported
        for  the twelve-month  period ended  September 30,  1996. Diluted  net
        income per common share was $0.42 in fiscal 1997 compared to a loss of
        $0.34 per share for the twelve-month period ended September 30, 1996.

             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  food service
        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
        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 $0.8  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, but decreased as a
        percentage  of revenues  from  3.2% for  the  nine-month period  ended
        September  30, 1995  to 3.0%  for the  nine-month fiscal  period ended
        September 30, 1996. The increase in general and administrative expense
        was primarily due to increases in Management Information Systems (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%.

             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 LOSS. Net loss increased $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.

        Liquidity and Capital Resources
        -------------------------------

             The Company's primary  sources of liquidity are  cash provided by
        operations  and borrowings under  its existing  credit facility.   The
        Company also generated  liquidity through the sale of  equity in 1998,
        which  proceeds  were used  to  reduce  debt  and to  finance  capital
        expansions.  Cash and temporary  investments totaled $5.4  million and
        net working capital totaled $23.2  million at September 30, 1998.   At
        September  30, 1997,  cash  and  temporary  investments  totaled  $2.7
        million and working capital totaled  $12.2 million.  The $11.0 million
        increase in  working  capital was  financed with  the existing  credit
        facility and the increases in the Company's operating results.

             The Company's net cash provided by (used in) operating activities
        totaled $28.4  million for  the fiscal year  ended September  30, 1998
        compared to $23.1 million for the fiscal year ended September 30, 1997
        and $(7.5) million for the nine-month period ended September 30, 1996.
        The increases during these periods are primarily a result of increases
        in  net income,  and  non-cash  charges which  were  offset by  volume
        related increases in net working capital investment. 

             Cash flow used in investing activities principally relates to the
        Company's investments in manufacturing,  distribution, milling and MIS
        assets. Capital expenditures  were $84.8 million  for the fiscal  year
        ended September 30,  1998, $28.4 million for the  year ended September
        30, 1997  and $3.0 million  for the nine-month period  ended September
        30, 1996, respectively.  The increase in spending for  the fiscal year
        ending September 30, 1998 was planned and is a result of the Company's
        previously referenced $86.0 million capital expansion program.

             Net cash provided by  financing activities was $59.0 million  for
        the  fiscal year ended September 30, 1998 compared to $6.3 million for
        the  fiscal  year ended  September  30,  1997.  The $59.0  million  is
        primarily a  result of  (1) $114.5  million in  net proceeds  from the
        fiscal  1998 Initial and Secondary Public Equity Offerings, which were
        substantially  used   for  repayment  of   short-term  and   long-term
        borrowings (2)  $60.8 million proceeds  from issuance of debt  (net of
        $.3 million  deferred  debt issuance  costs) partially  offset by  the
        $117.1   million  principal  payments   on  debt  and   capital  lease
        obligations.  Net cash  provided  by  financing  activities  was  $6.3
        million for  the year  ended September 30,  1997, as  a result  of net
        borrowings  required  to  fund the  Company's  operations  and working
        capital. 

             At September 30,  1998, the three-month LIBOR rate  was 5.3%, and
        the Company's aggregate, weighted average bank debt borrowing rate was
        7.9%.
         
             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 Credit Agreement.

             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  has committed to  spend $39 million on  raw material
        purchases  for  fiscal year  1999  and has  approximately  $60 million
        remaining on  the $75  million capital  expenditure  program which  it
        initiated in  1998, a  program which the  Company anticipates  will be
        fully funded by the  fourth quarter of  fiscal year 1999. The  Company
        expects to fund these commitments from operations and borrowings under
        the current revolving credit facility. The current credit facility has
        scheduled reductions in the amount  of the commitment beginning at the
        end  of  fiscal year  1999.  At  this  time, the  expected  borrowings
        outstanding under the current credit  facility (assuming the full  $60
        million remaining capital  expenditure commitment is funded  under the
        facility)  do  not  exceed  the  facility's  minimum  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. 

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

        Year 2000
        ---------
             Many 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 completed its assessment of its computer hardware
        and software  systems and has  recently begun upgrading  those systems
        that  were identified as not being  year 2000 compliant.  The existing
        systems are being upgraded either through modification or replacement.
        The Company expects to complete testing of the systems upgrades by the
        end  of its  first fiscal  1999 quarter  and to  convert  all critical
        systems to  year 2000 compliant   status during the second fiscal 1999
        quarter.  The Company has  alternate plans in the event that  critical
        system upgrading is  not completed on time, which  include short term,
        less-efficient programming  modifications or  manual operations.   The
        Company believes  these options are  sufficient to meet  the Company's
        internal needs.

             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, the Company  cannot make
        any assurances that the upgrade of the Company's computer systems will
        be completed on  schedule, that the  upgraded systems will be  free of
        defects or that the Company's  alternate plans will meet the Company's
        needs.   If any such  risks materialize, the Company  could experience
        material  adverse  consequences  to   the  Company's  operations   and
        financial performance, 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 is in the
        process of contacting its significant  suppliers and customers in 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.

             The Company incurred approximately $330,000 in the fiscal year of
        1998 and expects to incur approximately $250,000 in the fiscal year of
        1999  to resolve  the  Company's  year 2000  compliance  issues.   All
        expenses incurred  in connection with  year 2000 compliance  are being
        expensed as  incurred,  other than  acquisitions  of new  software  or
        hardware, which are capitalized.

        Other Matters
        -------------
             None.

        Effect of Inflation
        -------------------

             During the  last three  fiscal periods, inflation  has not  had a
        material effect on the Company.  The Company has experienced increases
        in  its cost  of borrowing  and  raw materials,  though generally  not
        related  to  inflation.  In general,  the  Company  has increased  the
        majority of customer sales prices to recover significant  raw material
        cost increases.  However, these  changes in  prices have  historically
        lagged price increases in the Company's raw material costs. 


        ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

             The  Company's   exposure  to  market   risk  through   financial
        instruments such as long-term debt is not material.

        <PAGE>

        ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                            AMERICAN ITALIAN PASTA COMPANY

                        INDEX TO AUDITED FINANCIAL STATEMENTS

                                                                 PAGE

        Report of Independent Auditors                            30

        Balance Sheets at September 30, 1998 and 1997             31

        Statements of Operations for the years ended
          September 30, 1998 and 1997 and the fiscal
          nine-months ended September 30, 1996                    32

        Statements of Stockholders' Equity for the years
        ended September 30, 1998 and 1997 and the fiscal
        nine-months ended September 30, 1996                      33

        Statements of Cash Flows for the years ended
          September 30, 1998 and 1997 and the fiscal
          nine-months ended September 30, 1996                    34

        Notes to Financial Statements                             35



        <PAGE>
                            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, 1998 and 1997,
        and the  related statements  of operations,  stockholders' equity  and
        cash  flows for the  years ended September  30, 1998 and  1997 and the
        nine-month  fiscal period  ended  September 30, 1996.  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, 1998 and 1997, and the
        results  of its  operations and  its cash  flows for  the years  ended
        September 30,  1998 and  1997 and the  nine-month fiscal  period ended
        September  30, 1996 in  conformity with generally  accepted accounting
        principles.

                                                /S/ ERNST & YOUNG LLP
                                                _____________________

        Kansas City, Missouri
        October 29, 1998


        <PAGE>
                            AMERICAN ITALIAN PASTA COMPANY


                                    BALANCE SHEETS


                                              SEPTEMBER 30,       SEPTEMBER 30,
                                                  1998                1997
                                              -------------       -------------
                                                     (IN THOUSANDS)



        ASSETS
        Current assets:
           Cash and temporary investments            $  5,442       $  2,724
           Trade and other receivables                 16,971          9,180
           Prepaid expenses and deposits                1,736          1,028
           Inventory                                   28,051         13,675  
           Deferred income taxes (Note 3)                 802            635
                                                     --------       --------
        Total current assets                           53,002         27,242
        Property, plant and equipment:
           Land and improvements                        4,834          4,540
           Buildings                                   60,196         37,491
           Plant and mill equipment                   149,027         84,233
           Furniture, fixtures and equipment            4,731          4,581
                                                     --------       --------
                                                      218,788        130,845
           Accumulated depreciation                   (38,250)       (29,332)
                                                     --------       --------
                                                      180,538        101,513
           Construction in progress                    25,069         23,721
                                                     --------       --------
        Total property, plant and equipment           205,607        125,234
        Deferred income taxes (Note 3)                     --          1,124
        Other assets                                      772          4,575
                                                     --------       --------
        Total assets                                 $259,381       $158,175
                                                     ========       ========

        LIABILITIES AND STOCKHOLDERS' EQUITY

        Current liabilities:
           Accounts payable                          $ 14,030       $  8,644
           Accrued expenses                             7,225          5,447
           Advance customer payments                    5,957             --
           Income tax payable                           1,342            134

           Current maturities of long-term debt
             (Note 2)                                   1,206            829
                                                     --------       --------
        Total current liabilities                      29,760         15,054
        Long-term debt (Note 2)                        48,519        100,137
        Deferred income taxes (Note 3)                  4,318             --
        Commitments and contingencies (Note 4)
        Stockholders' equity: (Notes 6 & 11)
           Preferred stock, $.001 par value:
              Authorized shares - 10,000,000               --             --
           Class A common stock, $.001 par value:
              Authorized shares   75,000,000               18             11
           Class B common stock, $.001 par value:
              Authorized shares   25,000,000               --             --
           Additional paid-in capital                 173,642         55,324
           Treasury stock                                 (13)            --
           Notes receivable from officers                (124)          (298)
           Retained earnings (accumulated deficit)      3,261        (12,053)
                                                     --------       --------
        Total stockholders' equity                    176,784         42,984
                                                     --------       --------
        Total liabilities and stockholders' equity   $259,381       $158,175
                                                     ========       ========


                   See accompanying notes to financial statements.



         <PAGE>
        <TABLE>
        <CAPTION>
                                        AMERICAN ITALIAN PASTA COMPANY

                                           STATEMENTS OF OPERATIONS


                                                                            
                                                                                TWELVE MONTHS      NINE MONTHS 
                                             YEAR ENDED        YEAR ENDED          ENDED              ENDED 
                                             SEPTEMBER 30,     SEPTEMBER 30,    SEPTEMBER 30,     SEPTEMBER 30,
                                                 1998              1997             1996              1996
                                                 ----              ----             ----              ----
                                                                                (Unaudited)

                                                            (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

        <S>                                    <C>              <C>              <C>              <C>
        Revenues (Note 5)                      $189,390         $129,143         $121,149            $ 92,074  
        Cost of goods sold                      140,110           93,467           91,230              68,555
        Plant expansion costs (Note 8)            1,606               --               --                  --
                                               --------         --------         --------            --------
        Gross profit                             47,674           35,676           29,919              23,519
        Selling and marketing expense,
          including product introduction
          costs (Note 10)                       12,984            13,664           18,445              16,798

         General and administrative expense      4,948             3,766            3,686               2,805
                                              --------          --------         --------            --------
        Operating profit                        29,742            18,246            7,788               3,916
        Interest expense, net                    1,539            10,119           10,770               8,023
                                              --------          --------         --------            --------
Income (loss) before income tax
    expense (benefit) and
    extraordinary item                          28,203             8,127           (2,982)             (4,107)
Income tax expense (benefit) (Note 3)           10,557             3,070           (1,139)             (1,556)
                                                -------          -------         --------            --------    
Income (loss) before extraordinary item         17,646             5,057           (1,843)             (2,551)
Extraordinary item:
  Loss due to early extinguishment
  of long-term debt, net of
  income taxes (Note 2)                         (2,332)               --           (1,647)             (1,647)  
                                              --------          --------         --------            --------
Net income (loss)                             $ 15,314          $  5,057         $ (3,490)        $    (4,198) 
                                              ========          ========         ========            ========

Net income (loss) per common share:
Before extraordinary item                     $   1.03          $   0.44         $  (0.18)        $     (0.25)
Extraordinary item                               (0.14)               --            (0.16)              (0.16)
                                              --------          --------         --------           ---------
Total                                         $   0.89          $   0.44         $  (0.34)        $     (0.41)
                                              ========          ========         ========            ========
Weighted-average common shares outstanding      17,223            11,466           10,219              10,223
                                              ========          ========         ========            ======== 
Net income (loss) per common
  share assuming dilution:
Before extraordinary item                     $   0.98          $   0.42        $   (0.18)        $     (0.25)
Extraordinary item                               (0.13)               --            (0.16)              (0.16)
                                              --------          --------         --------            --------
Total                                         $   0.85          $   0.42         $  (0.34)        $     (0.41)
                                              ========          ========         ========             =======
Weighted-average common shares outstanding      17,937            12,119           10,219              10,223
                                               ========         ========         ========            ======== 

                                See accompanying notes to financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                                        AMERICAN ITALIAN PASTA COMPANY

                                      STATEMENTS OF STOCKHOLDERS' EQUITY
                                                                                                 
                                                                                                  RETAINED
                                 CLASS A     CLASS A    ADDITIONAL                 NOTES          EARNINGS        TOTAL
                                 COMMON      COMMON      PAID-IN      TREASURY   RECEIVABLE     (ACCUMULATED   STOCKHOLDERS
                                 SHARES      STOCK       CAPITAL       STOCK    FROM OFFICERS     DEFICIT)        EQUITY
                                 -------     -------    ----------   ---------  -------------   ------------   ------------
                                                                                                
                                                             (IN THOUSANDS, EXCEPT SHARE DATA)

     <S>                       <C>           <C>          <C>         <C>    
     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        5,310,000         5         86,684         --           --               --         86,689 
       Issuance of 1,000,000
         shares of Class A
         Common stock, net of
         issuance costs        1,000,000         1         27,844         --           --               --         27,845 
       Paydown of notes
         receivable from
         officers                     --        --             --         --          174               --            174 
       Issuance of shares of
         Class A Common stock
         to option holders &
         other issuanc  es       310,554         1          3,790         --           --               --          3,791 
        Purchase of treasury
          stock                       --        --             --        (13)          --               --            (13)
         Net income                   --        --             --         --           --           15,314         15,314 
                              ----------     -----       --------      -----       ------         --------       -------- 
     Balance at September 30,
     1998                     18,086,610       $18       $173,642       $(13)      $ (124)          $3,261       $176,784 
                              ==========     =====       ========      ======      =======        ========       ======== 

                            See accompanying notes to financial statements.
     </TABLE>


     <PAGE>
     <TABLE>
     <CAPTION>
                            AMERICAN ITALIAN PASTA COMPANY

                               STATEMENTS OF CASH FLOWS
                                                                                 
                                                                                     NINE MONTHS
                                                   YEAR ENDED       YEAR ENDED          ENDED  
                                                  SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,
                                                     1998              1997             1996
                                                     ----              ----             ----
                                                                  (IN THOUSANDS)

     <S>                                         <C>              <C>                <C>
     Operating activities:                     
     Net income (loss                             $ 15,314         $ 5,057           $ (4,198)       
     Adjustments to rconcile net income
       (loss) to net cash provided by (used in)
        operations:
        Depreciation and amortization                9,576           7,828              5,434 
        Deferred income tax expense
          (benefit)                                  5,275           2,989             (1,556)
        Extraordinary loss due to early
          extinguishment of long-term debt           2,332              --              1,647 
        Changes in operating assets and
          liabilities:
            Trade and other receivables             (7,790)          3,347             (1,785)
            Prepaid expenses and deposits             (710)            464               (952)
            Inventory                              (14,376)          1,086             (1,830)
            Accounts payable and
              accrued expenses                       7,708           2,658             (3,961)
            Advance customer payments                5,957              --                 --
            Income tax payable                       5,432             134                 --
            Other                                     (290)           (492)              (276)
                                                 ---------         -------           -------- 
     Net cash provided by (used in) operating       28,428          23,071             (7,477)
       activities
     Investing activities:
     Additions to property, plant and equipment    (84,757)        (28,428)            (3,041)
                                                  --------         -------           -------- 
     Net cash used in investing activities         (84,757)        (28,428)            (3,041)
     Financing activities:
     Additions to deferred debt issuance costs        (325)         (2,115)            (2,083)
     Proceeds from issuance of debt                 60,763          11,730             86,470 
     Net borrowings under revolving line of
       credit facility                                  --          (5,500)            13,500 
     Principal payments on debt and
       capital lease obligations                  (117,083)        (19,810)           (85,669)
     Proceeds from issuance of common
       stock, net of issuance costs                115,692          21,958                100 
                                                  --------         -------           -------- 
     Net cash provided by financing activities      59,047           6,263             12,318 
                                                  --------         -------           -------- 
     Net increase in cash and temporary
       investments                                   2,718             906              1,800 
     Cash and temporary investments at
       beginning of period                           2,724           1,818                 18
                                                  --------         -------           -------- 
     Cash and temporary investments at
       end of period                              $  5,442         $ 2,724           $  1,818 
                                                  ========         =======           ======== 

               See accompanying notes to financial statements.
     </TABLE>


     <PAGE>
                            AMERICAN ITALIAN PASTA COMPANY

                            NOTES TO FINANCIAL STATEMENTS
                                  SEPTEMBER 30, 1998

     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 second largest producer
     and marketer of pasta products in the United States and has 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 1998 fiscal year is described as having
     ended on September 30, 1998.

     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.

     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, 1998 and 1997 was $111,000 and $196,000,
     respectively. At September_30, 1998 and 1997, approximately 49% and 37%,
     respectively, of accounts receivable were due from three and two customers,
     respectively.

          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 both the Excelsior Springs and Columbia plants. 
     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
     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 sheets at September
     30, 1998 and 1997, approximates fair value.  

     INTEREST RATE SWAP AGREEMENT

          The estimated fair value of the interest rate swap agreement of
     $<248,769> is the amount the Company would be required to pay to terminate
     the swap agreement at September 30, 1998.  The Company uses an interest
     rate swap agreement as part of its interest rate risk management program. 
     Net interest paid or received related to this agreement is recorded using
     the accrual method and is recorded as an adjuster to interest expense.  The
     Company had an interest rate swap agreement with a notional amount of $20
     million outstanding at September 30, 1998.  There were no deferred gains or
     losses related to any terminated interest rate swap agreements at September
     30, 1998.  The Company was not a party to an interest rate swap agreement
     at September 30, 1997.

     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:

                                 SEPTEMBER 30,           SEPTEMBER 30,
                                     1998                    1997
                              ------------------  ------------------
                                        (IN THOUSANDS)

     Finished goods                     $20,054             $ 9,310
     Raw materials, packaging 
      materials and work-in-process       7,997               4,365
                                        -------             -------
                                        $28,051             $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:

                                                  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 years
     ended September 30, 1998 and 1997, approximately $2,032,000 and $488,000,
     respectively, of interest cost was capitalized. There was no interest cost
     capitalized in fiscal 1996.

     OTHER ASSETS

          Other assets consist of the following:

                                      SEPTEMBER 30,     SEPTEMBER 30,
                                          1998               1997
                                     -------------    -------------
                                            (IN THOUSANDS)


     Debt issuance costs (Note 2)       $     --         $  4,258
     Package design costs                  2,571            1,598
     Other                                 1,019            1,702  
                                        --------         --------
                                           3,590            7,558
     Accumulated amortization             (2,818)          (2,983)
                                        --------         --------
                                        $    772         $  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. There  were no
     debt issuance costs  at September 30,  1998. (See Note  2).  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 to
     five  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  $714,000 and $378,000  at September 30, 1998  and 1997,
     respectively.

     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 has
     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.

     NET INCOME (LOSS) PER COMMON SHARE

          In  February 1997,  the Financial  Accounting  Standards Board  (FASB)
     issued SFAS No. 128,  "Earnings per Share."   This new standard  simplifies
     the EPS  calculation and  makes the  U.S. standard  for computing  EPS more
     consistent  with international accounting  standards.  The  Company adopted
     SFAS 128 in its first  quarter of fiscal 1998, December 31, 1997.   EPS for
     prior years has been restated to comply with SFAS 128.

          Under SFAS  128, primary EPS  was replaced with a  simpler calculation
     called basic EPS.  Basic EPS is calculated by dividing income  available to
     common  shareholders by  the weighted  average  common shares  outstanding.
     Previously,  primary  EPS  was  based  on  the  weighted  average  of  both
     outstanding  and issuable  shares assuming  all  dilutive options  had been
     exercised.     Under  SFAS   128,  fully  diluted   EPS  has   not  changed
     significantly,  but has been renamed diluted EPS.  Diluted EPS includes the
     effect  of  all  potentially  dilutive  securities,  such  as  options  and
     convertible preferred stock.

          Dilutive securities, consisting  of options (see NOTE  6), included in
     the  calculation  of diluted  weighted average  common shares  were 714,000
     shares in  fiscal 1998,  653,000 shares  in fiscal  1997 and  no shares  in
     fiscal 1996.

          Net income (loss)  per common share is calculated  using the weighted-
     average number  of common  shares and, in  the case  of diluted  net income
     (loss)  per  share,  common  equivalent  shares,  to  the  extent dilutive,
     outstanding  during  the  periods.   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.

     2.   LONG-TERM DEBT

          On  October 17,  1997, the  Company refinanced  certain of  its credit
     facilities.    The  principal  maturity  terms  of  the  new  $150  million
     unsecured, long-term revolving credit facility are as follows:


                                                           SCHEDULED COMMITMENT
                                         AMOUNT                  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
       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 is classified as interest expense.

          In  conjunction with  the October  1997  refinancing, the  unamortized
     balance of debt  issuance costs of $3.8  million which were related  to the
     previous credit facility, net of related tax benefits of $1.5 million, were
     written off as an extraordinary loss  on debt extinguishment as required by
     generally accepted accounting principles.

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

          Long-term debt consists of the following:

                                               SEPTEMBER 30,      SEPTEMBER 30, 
                                                   1998               1997
                                                   ----               ----
                                                       (IN THOUSANDS)

     Term loans under Credit Facility          $ 38,000             $ 93,938

     Capital lease, 12-year term with three,
       five-year renewal options, at an
       imputed interest rate of 10.3%             4,912                   --
     Capital lease, 15-year term with three,
       five-year renewal options, at an
       imputed interest rate of 12.5%             3,363                3,482
     Capital lease, eight-year term at
       an imputed interest rate of 8.5            1,832                2,054
     Other                                        1,618                1,492
                                               --------            ---------
                                                 49,725              100,966
     Less current portion                         1,206                  829
                                               --------             --------
                                               $ 48,519             $100,137
                                               ========             ========

          The  Company's weighted  average  interest rates  for  the year  ended
     September 30,  1998, relating  to the new  credit facility, the  year ended
     September 30,  1997 and  the nine-month fiscal  period ended  September 30,
     1996, both of which related to the old credit facility, are as follows:

                                                 1998      1997     1996
                                                 ----      ----     ----

     Weighted-average interest rate              8.6%      8.5%     8.4%

     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 new credit agreement, are as follows:

                                         LONG-TERM    CAPITAL LEASES
     YEAR                                   DEBT        AND OTHER      TOTAL
     ----                                   ----        ---------      -----
                                                     (IN THOUSANDS)

     1999                                $    --       $ 2,314 
     2000                                     --         2,044
     2001                                     --         1,811
     2002                                 38,000         1,790
     2003                                     --         2,182
     Thereafter                               --         8,684
                                         -------       -------
                                          38,000        18,825      $ 56,825
     Less imputed interest                    --         7,100         7,100
                                         -------       -------      --------
     Present value of net minimum
       payments                           38,000        11,725        49,725
     Less current portion                     --         1,206         1,206
                                         -------       -------      --------
     Long-term obligations               $38,000       $10,519     $  48,519
                                         =======       =======      ========

          The  new  revolving  credit  facility   contains  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  Company   was  in  compliance   with  the
     restrictive covenants as of September 30, 1998.  The facility is unsecured.

          The Company leases certain assets  under capital lease agreements.  At
     September 30, 1998 and  1997, the cost of these assets  was $13,094,000 and
     $7,949,000,  respectively,   and  related   accumulated  amortization   was
     $1,357,000 and $687,000, respectively.

     3.  INCOME TAXES

          At  September 30,  1998, the  Company  has net  operating loss  carry-
     forwards for federal income tax purposes that expire as follows:

                     2010                               $ 4,192
                     2011                                12,584
                     2012                                 3,063
                                                        -------
                                                        $19,839
                                                        =======

     The Company also had state  income enterprise zone credits of approximately
     $1_million that expired in 1997.  These credits were fully reserved through
     a valuation allowance as they were 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:

                                              SEPTEMBER 30,       SEPTEMBER 30, 
                                                  1998                 1997
                                                  ----                 ----
                                                       (IN THOUSANDS)
     Deferred tax assets:
     Net operating loss carry-forward           $ 7,539              $10,183 
     State enterprise zone credits                   --                1,031
     AMT credit carry-forward                     1,976                  676
     Other                                          690                  732
                                                -------              -------
     Total deferred tax assets                   10,205               12,622
     Deferred tax liabilities:
     Book basis of tangible assets
       greater than tax                          13,285                9,404
     Other                                          436                  428
                                                -------              -------
     Total deferred tax liabilities              13,721                9,832
                                                -------              -------
     Net deferred tax assets (liabilities)
        before allowance                         (3,516)               2,790
     Valuation allowance for deferred
       tax assets                                    --               (1,031)
                                                -------              -------
     Net deferred tax assets (liabilities)      $(3,516)             $ 1,759
                                                =======              =======

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

                                                                  NINE MONTHS
                                     YEAR ENDED      YEAR ENDED       ENDED
                                   SEPTEMBER 30,    SEPTEMBER 30, SEPTEMBER 30,
                                       1998             1997          1996
                                       ----             ----          ----
                                                    (IN THOUSANDS)

     Current income tax expense        $ 5,282        $    81        $    --
     Deferred tax expense (benefit)      5,275          2,989         (1,556)
                                       -------        -------        -------
     Net income tax expense (benefit)  $10,557        $ 3,070        $(1,556)
                                       =======        =======        =======

          The  reconciliation of income  tax computed at  the U.S._statutory tax
     rate to income tax expense is as follows:

                                                                    NINE MONTHS
                                    YEAR ENDED      YEAR ENDED         ENDED
                                  SEPTEMBER 30,    SEPTEMBER 30,   SEPTEMBER 30,
                                      1998             1997            1996
                                      ----             ----            ----
                                                   (IN THOUSANDS)
     Income (loss) before
      income taxes                    $28,203         $ 8,127        $(4,107)
     U.S. statutory tax rate             x 35%           x 34%          X 34% 
                                      -------         -------        -------
     Federal income tax expense
      (benefit) at U.S.statutory
      rate                              9,871           2,763        (1,396)
     State income tax expense
      (benefit), net of federal
      tax effect                        1,146             325          (165)
     Other, net                          (460)            (18)            5  
                                      -------         -------       -------
     Net income tax expense (benefit) $10,557         $ 3,070       $(1,556)
                                      =======         =======       =======

     Income tax expense (benefit) allocated to other items was as follows:

                                                                   NINE MONTHS
                                   YEAR ENDED      YEAR ENDED          ENDED
                                 SEPTEMBER 30,     SEPTEMBER 30,   SEPTEMBER 30,
                                     1998              1997            1996
                                     ----              ----            ----
                                                   (IN THOUSANDS)

     Extraordinary item            $(1,429)         $    --          $(1,010)

     Stock option arrangements (1   (3,024)              --              --

     (1) This amount has been recorded directly to "Additional Paid-In Capital".

     4.  COMMITMENTS AND CONTINGENCIES

          The   Company  has  committed  approximately  $40  million  to  expand
     significantly  its   existing  manufacturing,   milling  and   distribution
     facilities.  Additionally,  the  Company  has committed  approximately  $35
     million  to  construct   its  third  manufacturing  facility   in  Kenosha,
     Wisconsin.  The expansion  assets are anticipated  to be placed in  service
     during  fiscal  1999.  As  of  September  30,  1998,  cumulative  expansion
     expenditures are  $25,069,000, including capitalized  interest of $293,000.
     The remaining expansion costs will be funded from the available bank credit
     facilities and cash provided by operations.

          The   Company  had   durum   wheat   purchase   commitments   totaling
     approximately $39 million  and $15 million at September_30,  1998 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, 1998.

     5.  MAJOR CUSTOMERS

          Sales to a certain customer during the  years ended September 30, 1998
     and 1997  and the fiscal  nine months ended September  30, 1996 represented
     19%, 27% and  27% of revenues,  respectively.  Sales  to a second  customer
     during  the years  ended September 30,  1998 and  1997 and the  fiscal nine
     months  ended September 30, 1996 represented 15%,  22% and 19% of revenues,
     respectively.  Sales  to a third  customer during fiscal  1998 were 24%  of
     revenues.  There were no sales to this customer in the prior fiscal years.

     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 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.  In  October
     1997,  a  third stock  option  plan  was  established that  authorizes  the
     granting of  options to purchase  up to  2,000,000 shares of  the Company's
     common  stock by certain  officers and  key employees.   The  stock options
     expire 10 years from the date of grant and become exercisable over the next
     three  to five  years in  varying  amounts depending  on the  terms  of the
     individual option agreements.

          Pro forma information  regarding net income and earnings  per share is
     required  by SFAS No. 123,  and has been  determined as if  the Company had
     accounted  for its employee  stock options under  the fair value  method of
     SFAS  No. 123.  The fair value for  these options was estimated at the date
     of  grant using  a Black-Scholes  option pricing  model with  the following
     weighted-average  assumptions for fiscal 1998, 1997 and 1996, respectively:
     risk-free interest rates of 6%, dividend yields of zero, volatility factors
     of the expected market price of the Company's common stock of .429 for 1998
     and  none  was assumed  for  the  previous  years; and  a  weighted-average
     expected life of the option of one to five years.

          The  Black-Scholes option  valuation model  was developed  for use  in
     estimating  the  fair  value  of  traded  options  which  have  no  vesting
     restrictions  and are  fully transferable.   In addition,  option valuation
     models  require the  input of  highly subjective assumptions  including the
     expected  stock price  volatility.   Because the  Company's employee  stock
     options have characteristics  significantly different from those  of traded
     options, and  because  changes  in  the subjective  input  assumptions  can
     materially affect  the fair  value estimate, in  management's opinion,  the
     existing models do not necessarily provide a reliable single measure of the
     fair value of its employee stock options.

          For purposes of pro forma disclosures, the estimated fair value of the
     options is  amortized to  expense over  the options'  vesting period.   The
     Company's  pro forma information follows (in  thousands except for earnings
     per share information):

                                             1998               1997
                                             ----               ----
          Pro forma net income             $13,961            $4,923
          Pro forma earnings per share:
             Basic                           $0.81             $0.43
             Diluted                         $0.78             $0.41

          Amounts  for  the  1996  pro  forma net  income  were  not  materially
     different  from  amounts   reported  in  the  accompanying   statements  of
     operations.

          A  summary  of  the  Company's  stock  option  activity,  and  related
     information is as follows:

                                                          Weighted
                                                          Average
                           Number of     Option Price     Exercise
                            Shares        per Share        Price    Exercisable
                           ---------     ------------     --------  -----------

     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
        Exercised           (309,187)    $2.33-$12.23    $   3.10
        Granted            1,084,145    $12.23-$30.00    $  18.98
        Canceled/Expired     (31,979)    $4.92-$18.00    $  15.43
                           ---------
    Outstanding at
      September 30, 1998   1,922,305     $4.92-$30.00    $14.14       626,985
                           =========

          The  following table summarizes outstanding and exercisable options at
     September 30, 1998:

                        OPTIONS OUTSTANDING            OPTIONS EXERCISABLE
                        -------------------            -------------------
     EXERCISE        NUMBER     WEIGHTED AVERAGE    NUMBER     WEIGHTED AVERAGE 
     PRICE         OUTSTANDING  EXERCISE PRICE    EXERCISABLE  EXERCISE PRICE
     --------      -----------  ----------------   ----------- ----------------
     $4.92            361,024          $4.92        342,949        $4.92
     $7.02            169,244          $7.02        112,829        $7.02
     $12.23           331,071         $12.23        171,207       $12.23
     $18.00           959,327         $18.00             --           --
     $23.25-$27.56     45,889         $27.31             --           --
     $29.38-$30.00     55,750         $29.49             --           --

        7.  EMPLOYEE BENEFIT PLANS

             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  $270,000, $200,000 and $124,000  for the
        years ended  September 30, 1998  and 1997 and  the fiscal  nine months
        ended September 30, 1996, respectively.

             The Company sponsors an Employee Stock Purchase Plan (ESPP) which
        offers all employees  the election to purchase AIPC common  stock at a
        price equal to 95% of the market value on the first or last day of the
        calendar  quarter,  whichever  is  less.     At  September  30,  1998,
        authorized shares under this plan were 50,000.

        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 $1,606,000 for the year
        ended September 30, 1998.

        9.  SUPPLEMENTAL CASH FLOW INFORMATION


                               YEAR ENDED     YEAR ENDED    NINE MONTHS ENDED
                              SEPTEMBER 30,  SEPTEMBER 30,   SEPTEMBER 30,
                                  1998           1997             1996
                             -------------   -------------  ---------------- 
                                                     (IN THOUSANDS)
        Supplemental
          disclosure of cash
          flow information:
           Cash paid for
             interest         $  3,670        $  9,899           $ 8,101
                              ========        ========          ========
           Cash paid for
            income taxes      $    226        $     --          $     50
                              ========        ========          ========
           Warehouse acquired
             in exchange for
              capital lease  $   5,079        $     --          $     --
                              ========        ========          ========

        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:
 
           
                                              YEAR ENDED   NINE MONTHS ENDED
                                             SEPTEMBER 30,   SEPTEMBER 30,
                                                 1997            1996
                                                 ----            ----
                                                    (IN THOUSANDS)

        Introductory advertising                $  137            $3,587
        In-store product demonstrations            307               692
        Direct response advertising amortization   200               166
        Product placement fees paid              1,633             3,113
        Introductory trade incentives               --               268
        Other                                      588               296
                                                 -----             -----
        Total product introduction costs        $2,865            $8,122
                                                ======            ======

             There were no such costs in fiscal 1998.

        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, of which $124,000 remains outstanding at September
        30, 1998.   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  are  classified as  a
        reduction to stockholders' equity in the accompanying balance sheet at
        September 30, 1998 and 1997.

        12.  BOARD OF DIRECTORS REMUNERATION POLICY

             The  Company provides outside  directors with an  annual retainer
        amount in common stock equal to $15,000 per director.  The issuance is
        in lieu  of a cash payment and occurs immediately following the annual
        meeting of the stockholders.   These shares are not registered and are
        restricted for a twelve-month period.

        ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE.

             Not applicable.


                                       PART III

             AIPC has incorporated by reference certain responses to the Items
        of this Part  III pursuant to Rule  12b-23 under the Exchange  Act and
        General  Instruction  G(3)  to  Form  10-K.  AIPC's  definitive  proxy
        statement for the 1998 annual meeting of stockholders (the "Definitive
        Proxy Statement") will be  filed no later than 120  days after October
        2, 1998.

        ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

             (a)  Directors of the Company

             The information set  forth in response to Item  401 of Regulation
        S-K under the  heading "Proposal 1 - Election of  Three Directors" and
        "The  Board of  Directors"  in AIPC's  Definitive  Proxy Statement  is
        incorporated herein by reference in partial response to this Item 10.

             (b)  Executive Officers of the Company

             The information set  forth in response to Item  401 of Regulation
        S-K under "Executive Officers of the Registrant" an unnumbered Item in
        Part 1 (immediately  following Item 4 Submission of Matters  to a Vote
        of  Security Holders)  of this  Form  10-K is  incorporated herein  by
        reference in partial response to this Item 10.

             The information set  forth in response to Item  405 of Regulation
        S-K  under the heading  "Section 16(a) Beneficial  Ownership Reporting
        Compliance"  in  AIPC's  Definitive  Proxy  Statement is  incorporated
        herein by reference in partial response to this Item 10.


        ITEM 11.  EXECUTIVE COMPENSATION.

             The information set  forth in response to Item  402 of Regulation
        S-K  under  "Management  Compensation"  in  AIPC's   Definitive  Proxy
        Statement,  (other than The Compensation Committee Report on Executive
        Compensation and Stock Performance graph) is incorporated by reference
        in response to this Item 11.

        ITEM 12.  SECURITY  OWNERSHIP   OF  CERTAIN   BENEFICIAL  OWNERS   AND
        MANAGEMENT.

             The information set  forth in response to Item  403 of Regulation
        S-K under the heading "Stock Beneficially Owned by Directors, Nominees
        and Certain Executive  Officers" in AIPC's Definitive  Proxy Statement
        is hereby incorporated by reference in response to this Item 12.

        ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

             The information set  forth in response to Item  404 of Regulation
        S-K under the heading "Certain Relationships and Related Transactions"
        in  AIPC's  Definitive  Proxy  Statement  is  incorporated  herein  by
        reference in response to this Item 13. 

        ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
        8-K.

                  (a)  The following items are filed as a part of the report:

                       1.   The  Company's  financial statements  prepared  in
                            accordance  with  Regulation  S-X,  including  the
                            statements   of   operations,    cash   flow   and
                            stockholder's equity for the  three fiscal periods
                            September  30,   1998,  September  30,   1997  and
                            September  30, 1996 and  the balance sheets  as of
                            September 30, 1998 and 1997, and related notes and
                            the  independent  auditor's  opinion  thereon  are
                            included under Item 8 of this Annual Report.

                       2.   No financial  statement schedules are  required to
                            be  included   in  this   Annual  Report   by  the
                            Securities and Exchange Commission's regulations.

                       3.   The list of exhibits  following the signature page
                            of this Annual Report is incorporated by reference
                            herein in partial response to this Item.

                  (b)  Reports on Form 8-K.

             The Company did not  file any current reports on Form  8-K during
        the last fiscal quarter covered by this Annual Report.

        <PAGE>
                                      SIGNATURES

             Pursuant  to the  requirements  of  Section 13  or  15(d) of  the
        Securities Exchange Act  of 1934, the Registrant has  duly caused this
        report to be signed  on its behalf by the  undersigned, thereunto duly
        authorized.

                                      AMERICAN ITALIAN PASTA COMPANY

                                      By:  /S/ Timothy S. Webster
                                           ---------------------------------
                                           Timothy S. Webster
                                           President and Chief
                                             Executive Officer

        Date December 16, 1998

             Pursuant to  the requirements of  the Securities Exchange  Act of
        1934, this report has  been signed below  by the following persons  on
        behalf of  the Registrant  and  in the  capacities  and on  the  dates
        indicated.

                           POWER OF ATTORNEY AND SIGNATURES

             Each of the  undersigned hereby severally constitute  and appoint
        Timothy S. Webster and David E. Watson,  and each of them singly, with
        power  of substitution  and resubstitution,  as  his or  her true  and
        lawful attorneys, with full power to them and each of them  singly, to
        sign  for us  in  our names  in  the  capacities indicted  below,  all
        amendments to this  Annual Report on Form 10-K and generally to do all
        things  in our names  and on our  behalf in such  capacities to enable
        American Italian  Pasta Company to  comply with the provisions  of the
        Securities  Exchange   Act  of  1934,  and  all  requirements  of  the
        Securities and Exchange Commission with  respect to this Annual Report
        on Form 10-K.

        /S/ Horst W. Schroeder      Chairman of the       December  16, 1998
        ------------------------    Board of Directors

        /S/ Timothy S. Webster      President, Chief      December 16, 1998
        ------------------------    Executive Officer
                                    and Director
                                    (Principal Executive
                                    Officer)

        /S/ David E. Watson         Executive Vice        December 16, 1998
        ------------------------    President-Operations
                                    Support and Technology,
                                    Treasurer and
                                    Secretary (Principal
                                    Financial and
                                    Accounting Officer)

        /S/ Robert H. Niehaus       Director             December 16, 1998
        ------------------------

        /S/ Richard S. Thompson     Director             December 16, 1998
        ------------------------

        /S/ Jonathan E. Baum        Director             December 16, 1998
        ------------------------

        /S/ David Y. Howe           Director             December 16, 1998
        ------------------------

        /S/ Mark C. Demetree        Director             December 16, 1998
        ------------------------

        /S/ William R. Patterson    Director             December 16, 1998
        -----------------------
-
        /S/ John P. O'Brien         Director             December 16, 1998
        ------------------------


             SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
              PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH
           HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT

        Not applicable.

        <PAGE>
                                    EXHIBIT INDEX


        Exhibit
        Number    Description
        -------   -----------
        (2)       Plan of Acquisition, Reorganization,Arrangement, Liquidation
                  or Succession

                  Not applicable.

        (3)       Articles and By-Laws

                  3.1       The Company's amended and restated Certificate  of
                            Incorporation  dated  October  7, 1997,  which  is
                            attached   as   Exhibit  3.1   to   the  Company's
                            registration  statement on  Form  S-1, as  amended
                            (Commission   file   no.  333-32827)   (the   "IPO
                            Registration  Statement"),   is  incorporated   by
                            reference herein as Exhibit 3.1.

                  3.2       The Company's amended  and restated By-Laws  dated
                            October  7, 1997, which is attached as Exhibit 3.2
                            to   the    IPO   Registration    Statement,   are
                            incorporated by reference herein as Exhibit 3.2.

        (4)       Instruments  Defining   the  Rights  of   Security  Holders,
                  Including Indentures

                  4.1       The   specimen   certificate    representing   the
                            Company's Class  A Convertible  Common Stock,  par
                            value  $0.001  per  share, which  is  attached  as
                            Exhibit  4.1 to  the  Registration Statement,  are
                            incorporated by reference herein as Exhibit 4.1.

                  4.2       The   specimen   certificate    representing   the
                            Company's Class  B Convertible  Common Stock,  par
                            value  $0.001  per  share,  which  is  attached as
                            Exhibit  4.2 to  the  Registration Statement,  are
                            incorporated by reference herein as Exhibit 4.2.

                  4.3       Section 7.1  of the Company's amended and restated
                            Certificate    of    Incorporation,    which    is
                            incorporated   herein    as   Exhibit    3.1,   is
                            incorporated by reference herein as Exhibit 4.3.

                  4.4       Article II of  the Company's amended  and restated
                            Bylaws,  which is  incorporated herein  as Exhibit
                            3.2,  is  incorporated  by   reference  herein  as
                            Exhibit 4.4.

                  4.5       Sections  1,  2,  3,  4  of  Article  III  of  the
                            Company's amended  and restated  Bylaws, which  is
                            incorporated   herein    as   Exhibit    3.2,   is
                            incorporated by reference herein as Exhibit 4.5.

                  4.6       Article  VII of the Company's amended and restated
                            Bylaws,  which is  incorporated herein  as Exhibit
                            3.2,  is  incorporated  by   reference  herein  as
                            Exhibit 4.6.

                  4.7       Article IX  of the Company's  amended and restated
                            Bylaws, which  is incorporated  herein as  Exhibit
                            3.2,  is  incorporated   by  reference  herein  as
                            Exhibit 4.7.

                  4.8       Amended and Restated $150,000,000 revolving credit
                            facility dated October 17, 1997 by and between the
                            Company and  Bankers Trust, which  is attached  as
                            Exhibit 10 to the Company's quarterly report dated
                            January 29, 1998 on Form 10-Q (Commission file no.
                            001-13403), is incorporated by reference hereto as
                            Exhibit   4.8.     Such  agreement   replaces  the
                            Company's  Amended and  Restated Revolving  Credit
                            Agreement dated  April 11, 1997 (which  is Exhibit
                            10.1 to the  Company's Annual report on  Form 10-K
                            for the year ended October 3, 1997).

        (9)       Voting Trust Agreements

                  Not applicable.

        (10)      Material Contracts

                  10.1      Board of Directors Remuneration Policy is attached
                            hereto as Exhibit 10.1.

                  10.2      Manufacturing and Distribution  Agreement dated as
                            of April 15, 1997  between Bestfoods International
                            Inc. and the Company, which is attached as Exhibit
                            10.2  to   the  IPO  Registration   Statement,  is
                            incorporated by reference herein as Exhibit 10.2.

                  10.3      Amended  and   Restated  Supply   Agreement  dated
                            October 29, 1992, as amended July 1, 1997, between
                            the  Company  and  Sysco  Corporation,  which   is
                            attached as  Exhibit 10.3 to  the IPO Registration
                            Statement, is incorporated by  reference herein as
                            Exhibit 10.3.

                  10.4      Warehouse  Lease dated  May 23,  1995  between the
                            Company  and Lanter Company,  which is attached as
                            Exhibit 10.4 to the IPO Registration Statement, is
                            incorporated by reference herein as Exhibit 10.4.

                  10.5      Employment  Agreement  between   the  Company  and
                            Timothy  S.  Webster  effective October  8,  1997,
                            which  is  attached  as Exhibit  10.5  to  the IPO
                            Registration   Statement,   is   incorporated   by
                            reference herein as Exhibit 10.5.

                  10.6      Employment  Agreement  dated  September  30,  1997
                            between the Company and  Horst W. Schroeder, which
                            is   attached  as   Exhibit   10.6  to   the   IPO
                            Registration   Statement,   is   incorporated   by
                            reference herein as Exhibit 10.6.

                  10.7      Employment  Agreement  dated  September  30,  1997
                            between  the Company and David E. Watson, which is
                            attached as  Exhibit 10.7 to the  IPO Registration
                            Statement, is incorporated by reference herein  as
                            Exhibit 10.7.

                  10.8      Employment  Agreement  dated  September  30,  1997
                            between  the Company and Norman F. Abreo, which is
                            attached  as Exhibit 10.8  to the IPO Registration
                            Statement, is incorporated by reference herein  as
                            Exhibit 10.8.

                  10.9      Employment  Agreement  dated  September  30,  1997
                            between  the Company and David B. Potter, which is
                            attached as Exhibit 10.9  to the IPO  Registration
                            Statement, is incorporated by reference herein  as
                            Exhibit 10.9.

                  10.10     Second Amended and Restated  Shareholders' 
                            Agreement dated  April  7,  1998  by  and
                            between  the parties named therein,  which 
                            is attached  as Exhibit 10.10  to the
                            registration statement dated April  9, 
                            1998, as  amended (file  no. 333-49719) (the
                            "Second Registration Statement"), is 
                            incorporated by reference herein as
                            Exhibit 10.10.

                  10.11     American  Italian  Pasta Company  1992  Stock
                            Option  Plan, which  is  attached as  Exhibit
                            10.11 to  the IPO Registration  Statement, is
                            incorporated by  reference herein  as Exhibit
                            10.11.

                  10.12     American   Italian    Pasta   Company    1993
                            Non-Qualified  Stock  Option Plan,  which  is
                            attached   as  Exhibit   10.12  to   the  IPO
                            Registration  Statement,  is  incorporated by
                            reference herein as Exhibit 10.12.

                  10.13     1996 Salaried  Bonus Plan, which  is attached
                            as  Exhibit  10.13  to  the IPO  Registration
                            Statement,  is   incorporated  by   reference
                            herein as Exhibit 10.13.

                  10.14.1   1997 Equity Incentive  Plan, which is  attached as
                            Exhibit 10.14  to the IPO  Registration Statement,
                            is  incorporated  by reference  herein  as Exhibit
                            10.14.1.

                  10.14.2   First  amendment  to 1997  Equity  Incentive Plan,
                            which is attached as Exhibit 10.1 to the Company's
                            July 3, 1998  Form 10-Q (Commission file  no. 001-
                            13403), is incorporated  by reference  here in  as
                            Exhibit 10.14.2.

                  10.15     Product   Supply    and   Pasta    Production
                            Cooperation  Agreement  dated   May  7,  1998
                            between  the  Registrant and  Harvest  States
                            Cooperatives  which  is attached  as  Exhibit
                            10.2  to the Company's July 3, 1998 Form 10-Q
                            (Commission   file    no.   001-13403),    is
                            incorporated by  reference herein  as Exhibit
                            10.15.

                  10.16     Warehouse lease dated September 2, 1997 between
                            the Company and Lanter Company, which is attached
                            Exhibit 10.5 to the Second Registration Statement,
                            is incorporated by reference herein as Exhibit
                            10.16.

        (11)      Statement recomputation of per share earnings 

                  Not applicable.

        (12)      Statements re computation of ratios 

                  Not applicable.

        (13)      Annual  report to security  holders, Form 10-Q  or quarterly
                  report to security holders

                  Not applicable.

        (16)      Letter re change in certifying accountant 

                  Not applicable.

        (18)      Letter re change in accounting principles

                  Not applicable.

        (21)      Subsidiaries of the registrant

                  Not applicable.

        (22)      Published report  regarding  matters submitted  to  vote  of
                  security holders

                  Not applicable.

        (23)      Consents of experts and counsel

                  Consent of Ernst  & Young LLP is attached  hereto as Exhibit
                  23.

        (24)      Power of Attorney

                  The power of attorney is set forth on the  signature page of
                  this Annual Report.

        (27)      Financial Data Schedule 

                  The  Company's Financial Data Schedule is attached hereto as
                  Exhibit 27.

        (99)      Additional Exhibits

                  Not applicable.