<PAGE>

================================================================================


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                          ----------------------------
                                    FORM 10-Q

(Mark One)

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

     For the quarterly period ended September 30, 2001

                                       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 001-14255
                          ----------------------------

                                AURORA FOODS INC.
             (Exact Name of Registrant as Specified in Its Charter)

              DELAWARE                                  94-3303521
              --------                                  ----------
   (State or Other Jurisdiction of           (IRS Employer Identification No.)
    Incorporation or Organization)

                    11432 Lackland Road, St. Louis, MO 63146
           (Address of Principal Executive Office, Including Zip Code)

                                 (314) 801-2300
              (Registrant's Telephone Number, Including Area Code)
                          ----------------------------

     Indicate by check mark whether the registrant (1) has filed all 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 the number of shares outstanding of each of the registrant's
classes of common stock as of the Latest practicable date.

<TABLE>
<CAPTION>

                                                                     Shares Outstanding
                                                                      November 2, 2001
                                                                     ------------------
     <S>                                                             <C>
     Common stock, $0.01 par value..................................    71,610,091
</TABLE>

     The number of shares outstanding as of November 2, 2001 reflects the
initial share transfers to and from the Company in connection with the
settlement, as described in Note 6 to the financial statements included herein.



================================================================================

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

See pages 3 through 14.

                                        2

<PAGE>

                                AURORA FOODS INC.
                                 BALANCE SHEETS
                 (dollars in thousands except per share amounts)

<TABLE>
<CAPTION>
                                                                                         September 30,      December 31,
                                                                                              2001              2000
                                                                                         -------------      ------------
                                      ASSETS                                               (unaudited)
                                      ------
<S>                                                                                      <C>                <C>
Current assets:
     Cash and cash equivalents ........................................................   $     3,260        $       525
     Accounts receivable, net of $538 and $725 allowance, respectively ................        85,641            121,193
     Accounts receivable sold .........................................................       (35,029)           (38,565)
     Inventories ......................................................................        97,322            104,319
     Prepaid expenses and other assets ................................................        10,792              6,496
     Current deferred tax assets ......................................................        18,110             17,133
                                                                                          -----------        -----------
         Total current assets .........................................................       180,096            211,101

     Property, plant and equipment, net ...............................................       232,539            239,107
     Deferred tax asset ...............................................................        50,678             40,045
     Goodwill and other intangible assets, net ........................................     1,239,496          1,268,942
     Other assets .....................................................................        31,257             35,091
                                                                                          -----------        -----------
         Total assets .................................................................   $ 1,734,066        $ 1,794,286
                                                                                          ===========        ===========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
Current liabilities:
     Current portion of senior secured term debt ......................................   $    35,512        $    32,926
     Accounts payable .................................................................        79,174             50,456
     Accrued liabilities ..............................................................        66,264             87,840
                                                                                          -----------        -----------
         Total current liabilities ....................................................       180,950            171,222

     Senior secured term debt .........................................................       483,498            510,665
     Senior secured revolving debt facility ...........................................       140,000            160,000
     Senior subordinated notes ........................................................       401,663            401,837
     Capital lease obligation .........................................................         1,859                 --
     Other liabilities ................................................................        19,127              5,848
                                                                                          -----------        -----------
         Total liabilities ............................................................     1,227,097          1,249,572
                                                                                          -----------        -----------

Commitments and contingencies

Stockholders' equity:
     Preferred stock, $0.01 par value; 25,000,000 shares authorized; 3,750,000
         shares, Series A Convertible Cumulative, issued and outstanding, with a
         liquidation preference value of $15,915 ......................................            37                 37
     Common stock, $0.01 par value; 250,000,000 shares authorized; 74,196,132
         and 74,123,682 shares issued, respectively ...................................           742                741
     Paid-in capital ..................................................................       685,359            685,091
     Treasury Stock ...................................................................       (13,266)                --
     Promissory notes .................................................................           (57)              (227)
     Accumulated deficit ..............................................................      (161,822)          (140,928)
     Accumulated other comprehensive loss .............................................        (4,024)                --
                                                                                          -----------        -----------
         Total stockholders' equity ...................................................       506,969            544,714
                                                                                          -----------        -----------
         Total liabilities and stockholders' equity ...................................   $ 1,734,066        $ 1,794,286
                                                                                          ===========        ===========
</TABLE>

                       See accompanying notes to financial statements.

                                        3

<PAGE>

                                AURORA FOODS INC.
                            STATEMENTS OF OPERATIONS
                     (in thousands except per share amounts)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                    Three Months Ended September 30,
                                                                                    --------------------------------
                                                                                         2001              2000
                                                                                      ---------         ---------
<S>                                                                                 <C>                 <C>
Net sales .......................................................................     $ 242,718         $ 227,722
Cost of goods sold ..............................................................      (114,309)         (117,326)
                                                                                      ---------         ---------
      Gross profit ..............................................................       128,409           110,396
                                                                                      ---------         ---------
Brokerage, distribution and marketing expenses:

      Brokerage and distribution ................................................       (26,587)          (26,517)
      Trade promotions ..........................................................       (41,880)          (30,181)
      Consumer marketing ........................................................        (6,156)           (5,682)
                                                                                      ---------         ---------
           Total brokerage, distribution and marketing expenses .................       (74,623)          (62,380)
Amortization of goodwill and other intangibles ..................................       (10,896)          (10,663)
Selling, general and administrative expenses ....................................       (14,454)          (10,165)
Other financial, legal, accounting, consolidation and transition
      income (expense) ..........................................................            --           (23,925)
                                                                                      ---------         ---------
           Total operating expenses .............................................       (99,973)         (107,133)
                                                                                      ---------         ---------
      Operating income ..........................................................        28,436             3,263
Interest expense, net ...........................................................       (25,896)          (29,579)
Adjustment to value of derivatives ..............................................        (6,386)               --
Amortization of deferred financing expense ......................................          (867)             (735)
Other bank and financing expenses ...............................................           (38)             (100)
                                                                                      ---------         ---------
      Loss before income taxes ..................................................        (4,751)          (27,151)
Income tax benefit ..............................................................         1,545            11,857
                                                                                      ---------         ---------
      Net loss ..................................................................        (3,206)          (15,294)
Preferred dividends .............................................................          (318)              (33)
                                                                                      ---------         ---------
      Net loss available to common stockholders .................................     $  (3,524)        $ (15,327)
                                                                                      =========         =========
Basic and diluted loss per share available to common stockholders ...............     $   (0.05)        $   (0.22)
                                                                                      =========         =========
Weighted average number of shares outstanding ...................................        71,610            67,925
                                                                                      =========         =========
</TABLE>

                 See accompanying notes to financial statements.

                                       4

<PAGE>

                                AURORA FOODS INC.
                            STATEMENTS OF OPERATIONS
                     (in thousands except per share amounts)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                           Nine Months Ended September 30,
                                                                                           -------------------------------
                                                                                                2001              2000
                                                                                           -------------------------------
<S>                                                                                        <C>                 <C>
Net sales .............................................................................      $ 746,208         $ 724,451
Cost of goods sold ....................................................................       (357,147)         (357,186)
                                                                                             ---------         ---------
      Gross profit ....................................................................        389,061           367,265
                                                                                             ---------         ---------
Brokerage, distribution and marketing expenses:

      Brokerage and distribution ......................................................        (85,016)          (85,594)
      Trade promotions ................................................................       (133,695)         (126,388)
      Consumer marketing ..............................................................        (30,037)          (31,946)
                                                                                             ---------         ---------
           Total brokerage, distribution and marketing expenses .......................       (248,748)         (243,928)
Amortization of goodwill and other intangibles ........................................        (33,419)          (32,143)
Selling, general and administrative expenses ..........................................        (45,838)          (36,837)
Other financial, legal, accounting, consolidation and transition
        income (expense) ..............................................................          3,066           (49,947)
                                                                                             ---------         ---------
           Total operating expenses ...................................................       (324,939)         (362,855)
                                                                                             ---------         ---------
      Operating income ................................................................         64,122             4,410
Interest expense, net .................................................................        (79,227)          (81,126)
Adjustment to value of derivatives ....................................................        (11,287)               --
Amortization of deferred financing expense ............................................         (2,601)           (2,178)
Other bank and financing expenses .....................................................           (112)             (288)
                                                                                             ---------         ---------
      Loss before income taxes and cumulative effect of change in accounting ..........        (29,105)          (79,182)
Income tax benefit ....................................................................          9,144            28,506
                                                                                             ---------         ---------
      Net loss before cumulative effect of change in accounting .......................        (19,961)          (50,676)
Cumulative effect of change in accounting, net of tax of $5,722 .......................             --           (12,161)
                                                                                             ---------         ---------
      Net loss ........................................................................        (19,961)          (62,837)
Preferred dividends ...................................................................           (933)              (33)
                                                                                             ---------         ---------
      Net loss available to common stockholders .......................................      $ (20,894)        $ (62,870)
                                                                                             =========         =========
Basic and diluted loss per share available to common stockholders:

      Loss before cumulative effect of change in accounting ...........................      $   (0.29)        $   (0.75)
      Cumulative effect of change in accounting, net of tax ...........................             --             (0.18)
                                                                                             ---------         ---------
      Net loss available to common stockholders .......................................      $   (0.29)        $   (0.93)
                                                                                             =========         =========
Weighted average number of shares outstanding .........................................         72,794            67,344
                                                                                             =========         =========
</TABLE>

                 See accompanying notes to financial statements.

                                        5

<PAGE>

                                AURORA FOODS INC.
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                               Additional
                                                        Preferred    Common     Paid-in    Promissory    Treasury   Accumulated
                                                          Stock       Stock     Capital       Notes        Stock       Deficit
                                                        ---------   ---------  ----------  ----------    --------   -----------
<S>                                                     <C>         <C>        <C>         <C>           <C>        <C>
Balance at December 31, 2000 ........................   $      37   $     741  $  685,091  $     (227)         --   $  (140,928)

Receipt of shares from former management ............          --          --          --          --     (15,653)           --

Distribution of shares to shareholder class..........          --          --         113          --       2,387            --

Employee stock purchases ............................          --           1         152          --          --            --

Restricted stock awards .............................          --          --           3          --          --            --

Net loss ............................................          --          --          --          --          --       (19,961)

Cumulative preferred dividends ......................          --          --          --          --          --          (933)

Payment on officer promissory notes .................          --          --          --         170          --            --

Adoption of FAS 133 .................................          --          --          --          --          --            --

Net deferred hedging loss ...........................          --          --          --          --          --            --
                                                        ---------   ---------   ---------  ----------    --------   -----------

Balance at September 30, 2001 .......................   $      37   $     742   $ 685,359  $      (57)   $(13,266)  $  (161,822)
                                                        =========   =========   =========  ==========    ========   ===========

<CAPTION>
                                                         Accumulated
                                                            Other
                                                        Comprehensive
                                                            Loss             Total
                                                        -------------      ---------
<S>                                                     <C>                <C>
Balance at December 31, 2000 ........................   $          --      $ 544,714

Receipt of shares from former management ............              --        (15,653)

Distribution of shares to shareholder class .........              --          2,500

Employee stock purchases ............................              --            153

Restricted stock awards .............................              --              3

Net loss ............................................              --        (19,961)

Cumulative preferred dividends ......................              --           (933)

Payment on officer promissory notes .................              --            170

Adoption of FAS 133 .................................          (2,277)        (2,277)

Net deferred hedging loss ...........................          (1,747)        (1,747)
                                                        -------------      ---------

Balance at September 30, 2001 .......................   $      (4,024)     $ 506,969
                                                        =============      =========
</TABLE>

                 See accompanying notes to financial statements.

                                        6

<PAGE>

                                AURORA FOODS INC.
                            STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                  Nine Months Ended September 30,
                                                                                ------------------------------------
                                                                                      2001                2000
                                                                                ----------------   -----------------
<S>                                                                             <C>                <C>
Cash flows from operations:
      Net loss ..............................................................   $        (19,961)  $         (62,837)
      Adjustments to reconcile net loss to net cash from operations:
           Depreciation and amortization ....................................             56,513              52,807
           Deferred income taxes ............................................             (9,144)            (28,506)
           Recognition of loss on derivatives, net ..........................             10,265                  --
           Receipt of shares from former management .........................            (15,654)                 --
           Recognition of liability to shareholder class ....................             10,000                  --
           Non-cash other financial, legal and accounting expense ...........                 --              17,130
           Non-cash restructuring cost ......................................                 --               3,050
           Cumulative effect of change in accounting, net of tax ............                 --              12,161
           Net loss (gain) on sale of fixed assets and other, net ...........                261                (303)
           Changes in operating assets and liabilities:
                Accounts receivable .........................................             35,552             (19,916)
                Accounts receivable sold ....................................             (3,535)             37,591
                Inventories .................................................              6,996              11,210
                Prepaid expenses and other current assets ...................             (4,196)             12,183
                Accounts payable ............................................             27,786             (36,821)
                Accrued expenses ............................................            (28,820)            (35,417)
                Other non-current liabilities ...............................             (4,615)             (1,338)
                                                                                ----------------   -----------------
Net cash provided by (used in) operations ...................................             61,448             (39,006)
                                                                                ----------------   -----------------
Cash flows from investing activities:
      Asset additions .......................................................            (14,408)            (12,285)
      Proceeds from asset sales .............................................                 66               1,175
      Payment for acquisition of businesses .................................                 --              (7,984)
                                                                                ----------------   -----------------
Net cash used for investment activities .....................................            (14,342)            (19,094)
                                                                                ----------------   -----------------
Cash flows from financing activities:
      Senior secured revolving (repayments) borrowings, net .................            (20,000)             65,000
      Repayment of borrowings ...............................................            (24,694)            (19,749)
      Issuance of preferred stock ...........................................                 --              15,000
      Capital contributions and payments on officer promissory notes ........                323                 262
      Debt issuance and equity offering costs ...............................                 --                (132)
                                                                                ----------------   -----------------
Net cash (used for) provided by financing activities ........................            (44,371)             60,381
                                                                                ----------------   -----------------
Increase in cash and cash equivalents .......................................              2,735               2,281
Cash and cash equivalents, beginning of period ..............................                525                 315
                                                                                ----------------   -----------------
Cash and cash equivalents, end of period ....................................   $          3,260   $           2,596
                                                                                ================   =================
</TABLE>

                 See accompanying notes to financial statements.

                                        7

<PAGE>

                                AURORA FOODS INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                               September 30, 2001

NOTE 1 - BASIS OF PRESENTATION

Interim Financial Statements

          The interim financial statements of the Company included herein have
not been audited by independent accountants. The statements include all
adjustments, including normal recurring accruals, which management considers
necessary for a fair presentation of the financial position and operating
results of the Company for the periods presented. The statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in conformity
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The operating results for interim
periods are not necessarily indicative of results to be expected for an entire
year. Certain prior period amounts have been reclassified to conform to the
current period's presentation.

          For further information, reference should be made to the financial
statements of the Company and notes thereto included in the annual report on
Form 10-K of the Company for the year ended December 31, 2000.

The Company

          The Company has acquired premium, well recognized brands with strong
brand equity that had been undermarketed, undermanaged, non-core businesses to
their former corporate parents. The Company's objective is to renew the growth
of its brands by giving them the focus, strategic direction, product
development, and dedicated sales and marketing resources they need to thrive.
The Company's goal is to then sustain the growth of the brands with high levels
of marketing support directed towards increased advertising, consumer
promotions, new products, packaging improvements and new packaging. Each of the
Company's brands is a leading brand with significant market share and strong
consumer awareness. The Company primarily competes in the following three
industry segments: retail, food service and other distribution channels. The
Company's products are sold nationwide, primarily through food brokers to
supermarkets, wholesale and retail grocery accounts and other retail channels,
as well as food service distribution channels (restaurant chains,
business/industry and schools) and club store, private label and military
customers. Distribution is either directly to the customer or through
independent wholesalers and distributors.

          During the third quarter of 2001, the Company relocated its corporate
offices to 11432 Lackland Road, St. Louis, Missouri 63146. The new facility has
been leased pursuant to a ten year operating lease agreement. In addition, the
Company has leased additional dedicated space for its product development center
nearby. The product development facility has been leased pursuant to a ten year
lease which has been treated as a capital lease for accounting and reporting
purposes.

Accounting Change

          Effective January 1, 2000, the Company adopted the consensus reached
in EITF 00-14, Accounting for Certain Sales Incentives. This change in
accounting principle, required to be adopted by most companies in 2002, has the
effect of accelerating the recognition of certain marketing expenses as well as
requiring that certain items previously classified as distribution, promotion
and marketing expenses be classified as reductions of revenue. After adopting
EITF 00-14, the Company now expenses all estimated costs associated with
redemption of consumer coupons at the time they are distributed and the Company
has sold the products on which they will be redeemed, rather than reflecting
them as expense over the expected redemption period. In addition, the estimated
coupon redemption costs along with certain other allowances typically given to
retailers and others to facilitate certain promotions and distribution have been
reclassified from expense to net sales in the accompanying statement of
operations.

                                        8

<PAGE>

          As a result of this change in accounting in first quarter 2000, the
cumulative after tax effect of the change on prior years (to December 31, 1999)
of $12,161,000 was recognized as an expense in the Statement of Operations for
the three months ended March 31, 2000.

Impact of New Accounting Pronouncements

          In April, 2001, the Emerging Issues Task Force reached consensus on
EITF No. 00-25, Accounting for Consideration from a Vendor to a Retailer in
Connection with the Purchase or Promotion of the Vendor's Products. Although the
Company has not yet quantified the impact of this change in accounting,
management expects that adoption of this consensus will require that certain
expenses, currently classified as trade promotion expense, will be required to
be reclassified as reductions of net sales, with no effect on the reported
amount of operating income. Adoption of the change will be required in financial
statements issued by the Company for 2002, and prior periods' financial
statements will be restated to conform with the new presentation.

          In late June 2001, the FASB approved the issuance of FAS 142, Goodwill
and Other Intangible Assets which, for the Company, will be required to be
adopted as of January 1, 2002. Although the Company has not yet quantified the
impacts, management expects that the adoption of the new pronouncement will
result in decreases in the ongoing amount of amortization of goodwill and other
intangible assets reflected in the Company's statements of operations in future
periods.

NOTE 2 - INVENTORIES

         Inventories consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                                          September 30,        December 31,
                                                                              2001                 2000
                                                                         --------------        ------------
                                                                           (unaudited)
        <S>                                                              <C>                   <C>
        Raw materials............................................              $21,806             $ 28,764
        Work in process..........................................                  408                  299
        Finished goods...........................................               67,413               66,787
        Packaging and other supplies.............................                7,695                8,469
                                                                         -------------         ------------
                                                                               $97,322             $104,319
                                                                         =============         ============
</TABLE>


NOTE 3 - OTHER FINANCIAL, LEGAL, ACCOUNTING, CONSOLIDATION AND TRANSITION INCOME
      (EXPENSE)

          During the second quarter of 2001, in connection with the settlement
of the securities class action and derivative lawsuits, as more fully described
in Note 6, the Company received 3,051,303 shares, valued at $15.7 million, of
the Company's common stock from former management. These shares served as a
partial recovery of losses and were recorded as Treasury Stock at an amount
equal to the market value of the shares of $5.13 per share at the date the
settlement was confirmed by the court. In addition, the Company recorded a
liability for the value of the shares required to be distributed to members of
the shareholder class in the amount of $10.0 million and recorded accruals of
$1.9 million for estimated remaining costs to be incurred to complete all of
the Company's obligations under terms of the settlement agreements. As a
result, a pretax net gain of approximately $3.8 million was recorded and is
reflected as other financial legal and accounting income in the accompanying
Statement of Operations. During May 2001, the Company distributed 465,342
shares of its common stock as settlement for the first $2.5 million of the
common stock component of the settlement.

          Also during the second quarter of 2001, the Company recorded an
additional charge of $0.7 million to reflect the additional net cost expected
to be incurred by the Company for its unused office space in Columbus, Ohio,
subsequent to the administration consolidation in 2000.

          During the third quarter of 2000, the Company solicited and received
sufficient consents from holders of its senior subordinated notes to amend
certain provisions and waive certain events of default under the respective

                                        9

<PAGE>

indentures. Pursuant to the terms of the consent solicitation, the Company
issued, effective September 20, 2000, an aggregate of 6,778,577 shares of common
stock to the senior subordinated note holders who participated in the consent
solicitation.

          The common stock issued in connection with the consent solicitation
noted above was valued by the Company at the closing market price on September
20, 2000, less a 12.5% discount to reflect that the shares are subject to
transfer restrictions under the securities laws. The total increase to common
stock and paid-in-capital of $21,130,000 was allocated to other assets as
deferred financing costs ($4 million), with the balance ($17.1 million) recorded
as other financial, legal and accounting expense in the accompanying Statement
of Operations.

          Also during the third quarter of 2000, the Company issued to certain
investors affiliated with current shareholders, in exchange for $15 million,
3,750,000 shares of Series A Convertible Cumulative Preferred Stock ("Series A
Preferred Stock"), as part of the agreement with the senior subordinated
noteholders.

          The Company does not expect to record any material amounts of expense
related to these issues in future periods.

NOTE 4 - EARNINGS PER SHARE AND NUMBER OF COMMON SHARES OUTSTANDING

          Basic earnings per share represents the income available to common
stockholders divided by the weighted average number of common shares outstanding
during the measurement period. Diluted earnings per share represents the income
available to common stockholders divided by the weighted average number of
common shares outstanding during the measurement period while also giving effect
to all potentially dilutive common shares that were outstanding during the
period. Potentially dilutive common shares consist of stock options (the
dilutive impact is calculated by applying the "treasury stock method") and
convertible preferred stock.

          As none of the outstanding stock options and convertible preferred
stock have a potentially dilutive effect for the three and nine month periods
ended September 30, 2001 or 2000, the loss amounts and the weighted average
shares outstanding contained in the Statements of Operations were used to
compute both the basic and diluted loss per share.

Common shares outstanding

          The number of shares of common stock outstanding and the transactions
during the nine month period ended September 30, 2001 were as follows:

<TABLE>
<CAPTION>
                                                                          Common
                                                                           Stock         Treasury            Net
                                                                           Issued          Stock          Outstanding
                                                                       ------------    ------------      -------------
        <S>                                                            <C>             <C>               <C>
        Shares at December 31, 2000............................         74,123,682               -        74,123,682

        Receipt of shares from former management...............                  -      (3,051,383)       (3,051,383)

        Distribution of shares to shareholder class............                  -         465,342           465,342

        Employee stock purchases...............................             71,750               -            71,750

        Restricted stock awards to employees...................                700               -               700
                                                                       -----------     -----------       -----------

        Shares at September 30, 2001...........................         74,196,132      (2,586,041)       71,610,091
                                                                       ===========     ===========       ===========
</TABLE>

                                       10

<PAGE>

NOTE 5 - SEGMENT INFORMATION

         The Company groups its business in three operating segments: retail,
food service and other distribution channels. In general, each of the Company's
brands are sold through each of the segments. The retail distribution segment
includes all of the Company's brands and products sold to customers who sell or
distribute these products to consumers through supermarkets, grocery stores and
normal grocery retail outlets. The food service segment includes both branded
and non-branded products sold to customers such as restaurants,
business/industry and schools. The other distribution channels segment includes
sales of branded and private label products to club stores, the military, mass
merchandisers, convenience, drug and chain stores, as well as exports from the
United States.

         The Company's segments have changed from those presented in prior
years, consistent with the organization and responsibilities of management
reporting to the chief operating decision-maker for the purpose of assessing
performance. Information for the corresponding interim period in the prior year
has been restated to conform to the new definition. The Company's definition of
segment contribution differs from operating income as presented in its primary
financial statements and a reconciliation of the segmented and consolidated
results is provided in the following table. Interest expense, financing costs
and income tax amounts are not allocated to the operating segments.

         The Company's assets are not managed or maintained on a segmented
basis. Property, plant and equipment is used in the production and packaging of
products for each of the segments. Cash, accounts receivable, prepaid expenses,
other assets and deferred tax assets are maintained and managed on a
consolidated basis and generally do not pertain to any particular segment.
Inventories include primarily raw materials and packaged finished goods, which
in most circumstances are sold through any or all of the segments. The Company's
goodwill and other intangible assets, which include its trademarks, are used by
and pertain to the activities and brands sold across all of its segments. As no
segmentation of the Company's assets, depreciation expense (included in fixed
manufacturing costs and general and administrative expenses) or capital
expenditures is maintained by the Company, no allocation of these amounts has
been made solely for purposes of segment disclosure requirements.

         The following table presents a summary of operations by segment (in
thousands):

<TABLE>
<CAPTION>
                                                            Three months ended September 30,     Nine months ended September 30,
                                                            --------------------------------     -------------------------------
                                                              2001                   2000          2001                  2000
                                                            ---------              ---------     ---------             ---------
Net sales:                                                                                (unaudited)
<S>                                                         <C>                    <C>           <C>                   <C>
     Retail ............................................    $ 195,479              $ 188,709     $ 614,181             $ 606,020
     Food Service ......................................       19,123                 16,887        51,431                49,080
     Other .............................................       28,116                 22,126        80,596                69,351
                                                            ---------              ---------     ---------             ---------
         Total .........................................    $ 242,718              $ 227,722     $ 746,208             $ 724,451
                                                            =========              =========     =========             =========

Segment contribution and operating income:
     Retail ............................................    $  52,986              $  55,025     $ 150,854             $ 143,262
     Food Service ......................................        7,371                  5,520        18,077                16,427
     Other .............................................        8,162                  5,969        22,705                19,964
                                                            ---------              ---------     ---------             ---------
         Segment contribution ..........................       68,519                 66,514       191,636               179,653
     Fixed manufacturing costs .........................      (14,733)               (18,498)      (51,323)              (56,316)
     Amortization of goodwill and other intangibles ....      (10,896)               (10,663)      (33,419)              (32,143)
     Selling, general and administrative expenses ......      (14,454)               (10,165)      (45,838)              (36,837)
     Other financial, legal, accounting, consolidation .
        and transition income (expense) ................           --                (23,925)        3,066               (49,947)
                                                            ---------              ---------     ---------             ---------
         Operating income ..............................    $  28,436              $   3,263     $  64,122             $   4,410
                                                            =========              =========     =========             =========
</TABLE>

                                       11

<PAGE>

The following supplemental information provides net sales by product line across
all segments (in thousands):

<TABLE>
<CAPTION>
                                                 Three months ended September 30,      Nine months ended September 30,
                                                ----------------------------------   -----------------------------------
                                                    2001                 2000                2001               2000
                                                ------------         -------------   -------------         -------------
                                                                               (unaudited)
      <S>                                       <C>                  <C>             <C>                   <C>
      Seafood............................       $     37,002         $      35,362   $     161,959         $     151,427
      Baking mixes and frostings.........             65,543                55,748         175,948               155,380
      Bagels.............................             38,552                42,964         114,491               129,560
      Syrup and Mixes....................             33,803                30,770          99,177                97,794
      Breakfast products.................             31,220                29,741          88,917                86,572
      All other..........................             36,598                33,137         105,716               103,718
                                                ------------         -------------   -------------         -------------
          Totals.........................       $    242,718         $     227,722   $     746,208         $     724,451
                                                ============         =============   =============         =============
</TABLE>

NOTE 6 - CONTINGENCIES

Litigation

         During 2000, the Company was served with eighteen complaints in
purported class action lawsuits filed in the U.S. District Court for the
Northern District of California. The complaints received by the Company alleged
that, among other things, as a result of accounting irregularities, the
Company's previously issued financial statements were materially false and
misleading and thus constituted violations of federal securities laws by the
Company and the directors and officers who resigned on February 17, 2000 (Ian R.
Wilson, James B. Ardrey, Ray Chung and M. Laurie Cummings). The actions (the
"Securities Actions") alleged that the defendants violated Sections 10(b) and/or
Section 20(a) of the Securities Exchange Act and Rule 10b-5 promulgated
thereunder. The Securities Actions complaints sought damages in unspecified
amounts. These Securities Actions purported to be brought on behalf of
purchasers of the Company's securities during various periods, all of which fell
between October 28, 1998 and April 2, 2000.

         On April 14, 2000, certain of the Company's current and former
directors were named as defendants in a derivative lawsuit filed in the Superior
Court of the State of California, in the County of San Francisco, alleging
breach of fiduciary duty, mismanagement and related causes of action based upon
the Company's restatement of its financial statements. The case was then removed
to federal court in San Francisco.

         On January 16, 2001 the Company announced that it reached a preliminary
agreement to settle the securities class action and derivative lawsuits pending
against the Company and its former management team in the U.S. District Court in
the Northern District of California. On March 1, 2001, Stipulations of
Settlement for the Securities class action and derivative lawsuits were entered
into in the U.S. District Court in the Northern District of California to fully
resolve, discharge and settle the claims made in each respective. On May 11,
2001, the United States District Court for the Northern District of California
approved the settlement.

         Under the terms of the agreement, Aurora will pay the class members $26
million in cash and $10 million in common stock of the Company. On March 2,
2001, the Company entered into definitive agreements with certain members of
former management to transfer between approximately 3 million and 3.6 million
shares of common stock of the Company to the Company, in consideration for a
resolution of any civil claims that the Company may have, and partially
conditioned upon future events and circumstances. The cash component of the
settlement will be funded entirely by the Company's insurance. As of November 2,
2001, with respect to the common stock component of the settlement, the stock
received from former management would be sufficient, at current share prices, to
satisfy Aurora's obligation without issuing additional shares. The actual number
of shares of common stock of the Company needed to fund this component will be
based on average share prices, some of which will be determined at later dates.
However, members of the class had the opportunity to opt out of the settlement
agreement, and bring separate claims against the Company. Separate claims
representing an immaterial number of shares did opt out of the settlement
agreement.

                                       12

<PAGE>

         Pursuant to the settlement and the definitive agreements, the Company
received 3,051,303 shares of its common stock from former management. During
May, 2001, the Company distributed 465,342 shares of its common stock as
settlement for the first $2.5 million of the common stock component of the
settlement. The number of shares of common stock to be distributed as settlement
for the remaining $7.5 million portion of the common stock component of the
settlement will be determined at a later date. As of November 2, 2001, the
Company expects that the stock received or to be received from former management
will be sufficient to satisfy the Company's obligation without issuing
additional shares.

         In addition, the Company has agreed to continue to implement certain
remedial measures, including the adoption of an audit committee charter, the
reorganization of the Company's finance department, the establishment of an
internal audit function and the institution of a compliance program, as
consideration for resolution of the derivative litigation.

         The staff of the Securities and Exchange Commission (the "SEC") and the
United States Attorney for the Southern District of New York (the "U.S.
Attorney") also initiated investigations relating to the events that resulted in
the restatement of the Company's financial statements for prior periods ("Prior
Events"). The SEC and the U.S. Attorney requested that the Company provide
certain documents relating to the Company's historical financial statements. On
September 5, 2000, the Company received a subpoena from the SEC to produce
documents in connection with the Prior Events. The SEC also requested certain
information regarding some of the Company's former officers and employees,
correspondence with the Company's auditors and documents related to financial
statements, accounting policies and certain transactions and business
arrangements.

         On January 23, 2001 the U.S. Attorney announced indictments alleging
financial accounting fraud against members of former management and certain
former employees of the Company. The U.S. Attorney did not bring charges against
the Company.

         In a cooperation agreement with the U.S. Attorney, the Company
confirmed that it would continue to implement an extensive compliance program,
which will include an internal audit function, a corporate code of conduct, a
comprehensive policies and procedures manual, employee training and education on
policies and procedures and adequate disciplinary mechanisms for violations of
policies and procedures.

         In addition, the Company consented to the entry of an order by the SEC
requiring compliance with requirements for accurate and timely reporting of
quarterly and annual financial results, and the maintenance of internal control
procedures in connection with a civil action by the SEC concerning accounting
irregularities at the Company in 1998 and 1999. Aurora did not either admit or
deny any wrongdoing, and the SEC did not seek any monetary penalty. The Company
also committed to continue to cooperate with the SEC in connection with its
actions against certain former members of management and former employees.

         The Company is also subject to litigation in the ordinary course of
business.

         In the opinion of management, the ultimate outcome of any existing
litigation would not have a material adverse effect on the Company's financial
condition, results of operations or cash flows.

NOTE 7 - PREFERRED DIVIDENDS

         Dividends on the outstanding Series A Convertible Cumulative Preferred
Stock are being accrued each period, but are not being paid in cash. Preferred
dividends will be paid in additional preferred stock until such time as the
restrictions on payment of dividends contained in the senior secured debt
agreements are no longer in effect, at which time the Company will determine
whether future dividends will be paid in cash or additional shares of preferred
stock.

                                       13

<PAGE>

NOTE 8 - DERIVATIVE INSTRUMENTS

Adoption of SFAS 133

     The Company adopted Statement of Financial Accounting Standards (SFAS) No.
133, "Accounting for Derivative Instruments and Hedging Activities," as amended
by SFAS No. 137 and SFAS No. 138 (collectively the Statement), on January 1,
2001. The Statement requires that all derivative instruments be recorded on the
balance sheet at their fair value, with changes in the fair value of the
derivative instruments to be recorded in current earnings or deferred in other
comprehensive income, depending on whether a derivative is designated as and is
effective as a hedge and on the type of hedging transaction. In accordance with
the Statement, upon adoption the Company deferred hedging losses on designated
cash flow hedges of $2.3 million, which are net of tax of $1.4 million, to
accumulated other comprehensive losses. Additionally, the Company recognized the
fair value of its fair value hedge as a $1.1 million liability within the
balance sheet. The Company records the ineffectiveness of its hedges currently
in its statement of operations and those amounts were immaterial during the
quarter ended March 31, 2001.

     During the quarter ended June 30, 2001, one of the Company's cash flow
hedges and the Company's fair value hedge became ineffective, following the
significant reductions in interest rates from which the Company otherwise
benefits due to variable interest rates on its senior secured debt. As a result,
on June 30, 2001 the Company recorded an additional charge of approximately $4.9
million representing the net previously deferred expense and additional
liability arising during the second quarter of 2001, associated with these two
derivatives.

     During the third quarter of 2001, the continual decline in interest rates,
from which the Company otherwise benefits, had the impact of increasing the
Company's liability on its effective and ineffective hedging arrangements. As a
result, on September 30, 2001, the Company recorded an additional charge to
expense of $6.4 million to recognize the increase in the liability of its
ineffective hedges as required by FAS 133.

     The Company also deferred through other comprehensive income an additional
$2.3 million of increased liability on its effective cash flow hedge. At
September 30, 2001, the liability related its derivative instruments reflected
in other liabilities on the accompanying balance sheet totaled $16.8 million.

Cash Flow Hedge

     At September 30, 2001, the Company used an interest-rate swap to convert a
portion of its variable-rate debt to fixed rates to comply with provisions of
its senior lending agreement.

     As of September 30, 2001, the Company had deferred hedging losses in
accumulated other comprehensive income on designated cash flow hedges of $4.0
million, which is net of tax of $2.5 million.

                                       14

<PAGE>

NOTE 9 - OTHER COMPREHENSIVE LOSS

         The components of total comprehensive loss for the three and nine month
periods ended September 30, 2001 and 2000 were as follows (in thousands):

<TABLE>
<CAPTION>
                                                                  Three months ended September 30,   Nine months ended September 30,
                                                                  --------------------------------   -------------------------------
                                                                        2001             2000               2001             2000
                                                                     ---------         --------           --------         --------
                                                                                               (unaudited)
<S>                                                               <C>                  <C>                <C>              <C>
Net Loss .......................................................     $  (3,206)        $(15,294)          $(19,961)        $(62,837)
                                                                     ---------         --------           --------         --------

Other comprehensive income (loss), net of tax:

     Adoption of FAS 133 for hedging activities ................            --               --             (2,277)              --
     Loss deferred on qualifying cash flow hedges ..............        (2,315)              --             (3,423)              --
     Reclassification adjustment for cash flow
          hedging losses realized in net loss ..................           532               --              1,676               --
                                                                     ---------         --------           --------         --------

Total other comprehensive (loss) ...............................        (1,783)              --             (4,024)              --
                                                                     ---------         --------           --------         --------

     Total comprehensive loss ..................................     $  (4,989)        $(15,294)          $(23,985)        $(62,837)
                                                                     =========         ========           ========         ========
</TABLE>

NOTE 10 - DEBT

         During the third quarter of 2001, the Company's senior secured debt
agreement was amended to provide that for third quarter covenant purposes, the
proceeds from an asset sale anticipated to occur in October would be applied as
if it had occurred in the third quarter. In the event that the asset sale did
not occur, the lending agreement was further amended to reset the senior
leverage covenant, in return for a contingent fee, in the event that the Company
would not otherwise have met its senior leverage covenant. The asset sale did
not occur and the amendment was necessary to keep the company within the senior
leverage covenant. Consequently, the Company paid a $428,000 fee in October to
reset the third quarter covenant.

                                       15

<PAGE>

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         Reference is made to Notes to Financial Statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
presented in the annual report on Form 10-K of Aurora Foods Inc. for the year
ended December 31, 2000.

         The following discussion and analysis of the Company's financial
condition and results of operations should be read in conjunction with the
historical financial information included in the Financial Statements and notes
to the financial statements in Item 1 included herein. Unless otherwise noted,
years (2001 and 2000) in this discussion refer to the Company's three and nine
month periods ending on September 30, respectively.

                                       16

<PAGE>

Results of Operations for the Three Months Ended September 30

     The following table sets forth the results of operations for the periods
indicated as well as the percentage which the items in the Statements of
Operations bear to net sales.

                                AURORA FOODS INC.
                            STATEMENTS OF OPERATIONS
                        (Dollars and shares in thousands)
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                                           Three Months Ended September 30,
                                                                                ----------------------------------------------------
                                                                                         2001                       2000
                                                                                -------------------------   ------------------------
<S>                                                                              <C>             <C>        <C>             <C>
Net sales ....................................................................  $  242,718        100.0 %     227,722      100.0 %
Cost of goods sold ...........................................................    (114,309)       (47.1)     (117,326)     (51.5)
                                                                                ----------       ------     ---------      -----
     Gross profit ............................................................     128,409         52.9       110,396       48.5
                                                                                ----------       ------     ---------      -----
Brokerage, distribution and marketing expenses:
     Brokerage and distribution ..............................................     (26,587)       (11.0)      (26,517)     (11.6)
     Trade promotions ........................................................     (41,880)       (17.2)      (30,181)     (13.3)
     Consumer marketing ......................................................      (6,156)        (2.5)       (5,682)      (2.5)
                                                                                ----------       ------     ---------      -----
         Total brokerage, distribution and marketing expenses ................     (74,623)       (30.7)      (62,380)     (27.4)
Amortization of goodwill and other intangibles ...............................     (10,896)        (4.5)      (10,663)      (4.7)
Selling, general and administrative expenses .................................     (14,454)        (6.0)      (10,165)      (4.5)
Other financial, legal, accounting, consolidation and transition                        --           --
 income (expense) ............................................................          --           --       (23,925)     (10.5)
                                                                                ----------       ------     ---------      -----
         Total operating expenses ............................................     (99,973)       (41.2)     (107,133)     (47.1)
                                                                                ----------       ------     ---------      -----
     Operating income ........................................................      28,436         11.7         3,263        1.4
Interest expense, net ........................................................     (25,896)       (10.7)      (29,579)     (13.0)
Adjustment of value of derivatives ...........................................      (6,386)        (2.6)           --         --
Amortization of deferred financing expense ...................................        (867)        (0.4)         (735)      (0.3)
Other bank and financing expenses ............................................         (38)        (0.0)         (100)      (0.0)
                                                                                ----------       ------     ---------      -----
     Loss before income taxes ................................................      (4,751)        (2.0)      (27,151)     (11.9)
Income tax benefit ...........................................................       1,545          0.7        11,857        5.2
                                                                                ----------       ------     ---------      -----
     Net loss ................................................................      (3,206)        (1.3)      (15,294)      (6.7)
Preferred dividends ..........................................................        (318)        (0.2)          (33)      (0.0)
                                                                                ----------       ------     ---------      -----
     Net loss available to common stockholders ...............................  $   (3,524)        (1.5)%   $ (15,327)      (6.7)%
                                                                                ==========        =====     =========      =====

Basic and diluted loss per share available to common stockholders ............  $    (0.05)                 $   (0.22)
                                                                                ==========                  =========

EBITDA (1) ...................................................................  $   46,588         19.2 %   $  19,999        8.8 %
                                                                                ==========       ======     =========      =====

Adjusted EBITDA (2) ..........................................................  $   46,588         19.2 %   $  43,925       19.3 %
                                                                                ==========       ======     =========      =====

</TABLE>

(1)  EBITDA represents earnings before interest, taxes, depreciation and
     amortization and before the accounting change. The Company believes EBITDA
     provides additional information for determining its ability to meet debt
     service requirements. EBITDA does not represent and should not be
     considered an alternative to net income or cash flow from operations as
     determined by generally accepted accounting principles. EBITDA does not
     necessarily indicate whether cash flow will be sufficient for cash
     requirements and should not be deemed to represent funds available to the
     Company. The calculation of EBITDA does not include the commitments of the
     Company for capital expenditures and payment of debt. EBITDA, as presented,
     may not be comparable to similarly-titled measures of other companies.

(2)  Adjusted EBITDA is defined as EBITDA plus other financial, legal,
     accounting, consolidation and transition income (expense).

         The Company manages its business in three operating segments, the
retail, food service and other distribution channels. The separate financial
information of each segment is presented consistently with the manner in which
results are evaluated by the chief operating decision-maker in deciding how to
allocate resources and in assessing performance.

                                       17

<PAGE>

Net sales by operating segment for the three month periods ended September 30,
2001 and 2000 were as follows (in thousands):

                                                       2001           2000
                                                  -------------   -------------
        Net sales:                                          (unaudited)
             Retail...........................     $ 195,479       $ 188,709
             Food Service.....................        19,123          16,887
             Other............................        28,116          22,126
                                                  -------------   -------------
                  Total.......................     $ 242,718       $ 227,722
                                                  =============   =============

     Net sales increased $15.0 million or 6.6% to $242.7 million in 2001 from
$227.7 million in 2000. Overall retail net sales in 2001 increased 3.6% from the
prior year period, with net sales gains in five of the Company's seven product
lines due to increased volume and lower coupon costs. In the retail segment, the
overall net sales increase was led by gains in baking mixes and frosting with an
increase of 12.6% over 2000. These increases were principally due to strong cake
mix sales and frosting and brownie product introductions, along with better
trade promotion planning, better sales execution and more efficient spending by
tying multiple products into promotions. These gains were offset in part
primarily by lower net sales of frozen and refrigerated bagels, due to
consumption declines. Net sales also grew strongly in the Food Service and the
other distribution channels segments due to continued unit volume sales gains.

     Gross profit increased $18.0 million to $128.4 million in 2001 from $110.4
million in the prior year, primarily due to the sales volume increase. Total
variable margin was negatively impacted by segment mix, with a higher percentage
of total sales in the current year quarter being to the lower than average
margin food service and other channels segments. Gross profit was also favorably
impacted as a result of generally favorable plant operating efficiencies,
favorable overhead absorption relative to the prior year and the termination of
an unfavorable contract production arrangement.

     Brokerage and distribution expenses increased slightly to $26.6 million in
2001 from $26.5 million in 2000. Efficiencies in freight and warehousing costs
largely offset increased costs associated with the higher sales volumes.

     Trade promotions expense increased $11.7 million to $41.9 million in 2001
from $30.2 million in 2000. This increase was principally in the retail segment,
where additional performance based trade spending was used to help drive
additional volume and gross margin, as compared to the prior year when trade
promotion spending was at relatively low levels.

     Consumer marketing expenses increased $0.5 million to $6.2 million in 2001
as compared to $5.7 million in 2000, in line with the increase in sales.

     Selling, general and administrative expenses increased to $14.5 million in
2001 from $10.2 million in 2000 primarily due to increases in performance
related compensation costs, the number of corporate employees, generally higher
levels of employee benefit costs and higher legal expenses.

     Other financial, legal, accounting, consolidation and transition income
(expense). During 2000, as a result of the investigation into the Company's past
accounting practices, the resulting restatement of its financial statements,
litigation, governmental proceedings, defaults under its loan agreements and
related matters, the Company incurred financial, legal and accounting expenses,
charges to obtain waivers on its events of default and charges related to
amending its financing facilities. Such costs, which totaled $23.2 million for
the three months ended September 30, 2000, were expensed when incurred by the
Company and included a non-cash $17.1 million charge associated with the
issuance of common stock to certain holders of the Company's senior subordinated
debt, as discussed in Note 3 to the financial statements in Part I, Item 1 of
this Form 10-Q.

                                       18

<PAGE>

     Operating income increased to $28.4 million in 2001 from $3.3 million in
2000. The retail segment contribution declined $2.0 million or 3.7% principally
due to the increased trade promotion spending that was used to help drive
additional volume and gross margin, as compared to the prior year when this
spending was at relatively low levels. Operating income in 2000 was affected by
other financial, legal, accounting, consolidation and transition items.
Excluding other financial, legal, accounting, consolidation and transition
items, operating income increased $1.2 million in 2001.

     Interest and other financing expenses. The aggregate of net interest income
and expense, amortization of loan fees and other bank and financing expenses
increased to $33.2 million in 2001 from $30.4 million in 2000. This increase was
due to recording an additional $6.4 million of expense in 2001 to recognize the
net liability to the Company of two derivative instruments which were not
effective as hedges as required by FAS 133. See Note 8 to the financial
statements included in Part I, Item 1 of this Form 10-Q. This was offset in part
by lower interest costs resulting from lower levels of outstanding debt and
lower interest rates during the period as compared to the prior year.

     Income tax benefit. The income tax benefit recorded in 2001 and 2000 was
32.5% and 43.7%, respectively, of the pretax loss. The higher rate in 2000
reflected an adjustment during the quarter to bring the year-to-date effective
rate to the anticipated annual rate of 36%.

                                       19

<PAGE>

Results of Operations for the Nine Months Ended September 30

     The following table sets forth the results of operations for the periods
indicated as well as the percentage which the items in the Statements of
Operations bear to net sales.

                                AURORA FOODS INC.
                            STATEMENTS OF OPERATIONS
                        (Dollars and shares in thousands)
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                                            Nine Months Ended September 30,
                                                                                   -------------------------------------------------
                                                                                            2001                      2000
                                                                                   ------------------------   ----------------------
<S>                                                                                 <C>            <C>         <C>          <C>
Net sales ......................................................................    $ 746,208      100.0 %     $ 724,451     100.0 %
Cost of goods sold .............................................................     (357,147)     (47.9)       (357,186)    (49.3)
                                                                                    ---------     ------       ---------    ------
     Gross profit ..............................................................      389,061       52.1         367,265      50.7
                                                                                    ---------     ------       ---------    ------
Brokerage, distribution and marketing expenses:
     Brokerage and distribution ................................................      (85,016)     (11.4)        (85,594)    (11.8)
     Trade promotions ..........................................................     (133,695)     (17.9)       (126,388)    (17.4)
     Consumer marketing ........................................................      (30,037)      (4.0)        (31,946)     (4.5)
                                                                                    ---------     ------       ---------    ------
         Total brokerage, distribution and marketing expenses ..................     (248,748)     (33.3)       (243,928)    (33.7)
Amortization of goodwill and other intangibles .................................      (33,419)      (4.5)        (32,143)     (4.4)
Selling, general and administrative expenses ...................................      (45,838)      (6.1)        (36,837)     (5.1)
Other financial, legal, accounting, consolidation and transition                        3,066        0.4
  income (expense) .............................................................           --         --         (49,947)     (6.9)
                                                                                    ---------     ------       ---------    ------
         Total operating expenses ..............................................     (324,939)     (43.5)       (362,855)    (50.1)
                                                                                    ---------     ------       ---------    ------
     Operating income ..........................................................       64,122        8.6           4,410       0.6
Interest expense, net ..........................................................      (79,227)     (10.6)        (81,126)    (11.2)
Adjustment of value of derivatives .............................................      (11,287)      (1.5)             --        --
Amortization of deferred financing expense .....................................       (2,601)      (0.4)         (2,178)     (0.3)
Other bank and financing expenses ..............................................         (112)      (0.0)           (288)     (0.0)
                                                                                    ---------     ------       ---------    ------
     Loss before income taxes and cumulative effect of
          change in accounting .................................................      (29,105)      (3.9)        (79,182)    (10.9)
Income tax benefit .............................................................        9,144        1.2          28,506       3.9
                                                                                    ---------     ------        ---------   ------
     Net loss before cumulative effect of change in accounting .................      (19,961)      (2.7)        (50,676)     (7.0)
Cumulative effect of change in accounting, net of tax of $5,722 ................           --         --         (12,161)     (1.7)
                                                                                    ---------     ------       ---------    ------
     Net loss ..................................................................      (19,961)      (2.7)        (62,837)     (8.7)
Preferred dividends ............................................................         (933)      (0.1)            (33)     (0.0)
                                                                                    ---------     ------       ---------    ------
     Net loss available to common stockholders .................................    $ (20,894)      (2.8)%     $ (62,870)     (8.7)%
                                                                                    =========     ======       =========    ======
Basic and diluted loss per share available to common stockholders:
     Loss before cumulative effect of change in accounting .....................    $   (0.29)                 $   (0.75)
     Cumulative effect of change in accounting, net of tax .....................           --                      (0.18)
                                                                                    ---------                  ---------
     Net loss available to common stockholders .................................    $   (0.29)                 $   (0.93)
                                                                                    =========                  =========

EBITDA (1) .....................................................................    $ 118,208       15.8 %     $  55,103       7.6 %
                                                                                    =========     ======       =========    ======

Adjusted EBITDA (2) ............................................................    $ 115,142       15.4 %     $ 105,050      14.5 %
                                                                                    =========     ======       =========    ======
</TABLE>

(1)  EBITDA represents earnings before interest, taxes, depreciation and
     amortization and before the accounting change. The Company believes EBITDA
     provides additional information for determining its ability to meet debt
     service requirements. EBITDA does not represent and should not be
     considered an alternative to net income or cash flow from operations as
     determined by generally accepted accounting principles. EBITDA does not
     necessarily indicate whether cash flow will be sufficient for cash
     requirements and should not be deemed to represent funds available to the
     Company. The calculation of EBITDA does not include the commitments of the
     Company for capital expenditures and payment of debt. EBITDA, as presented,
     may not be comparable to similarly-titled measures of other companies.

(2)  Adjusted EBITDA is defined as EBITDA plus other financial, legal,
     accounting, consolidation and transition (expense).

                                       20

<PAGE>

Net sales by operating segment for the nine month periods ended September 30,
2001 and 2000 were as follows (in thousands):

                                                        2001            2000
                                                   -------------   -------------
         Net sales:                                          (unaudited)
              Retail.............................  $   614,181     $   606,020
              Food Service.......................       51,431          49,080
              Other..............................       80,596          69,351
                                                   -------------   -------------
                   Total.........................  $   746,208     $   724,451
                                                   =============   =============

     Net sales increased $21.8 million or 3.0% to $746.2 million in 2001 from
$724.5 million in 2000 due to volume increases and lower coupon costs. In the
retail segment, the overall sales increase was led by net sales gains in baking
mixes and frosting with an increase of 11.3% over 2000, and Van de Kamp's(R) and
Mrs. Paul's(R) seafood, with sales increasing 6.8% from the prior year. These
increases were principally due to better trade promotion planning and execution,
new product introductions and new consumer advertising and promotion. These
gains were offset in part by lower net sales of frozen and refrigerated bagels,
due to consumption declines, and a slight decline in syrup sales. Syrup sales in
2000 included a product introduction and heavy trade spending to drive volume.
Significantly lower trade spending and couponing on syrups in 2001 reduced unit
volumes, however, total product contribution increased. Food service sales
volumes increased, but were offset in part by product and customer mix. Net
sales to other distribution channels increased $11.2 million due to a 7.0%
volume increase and favorable product and customer mix.

     Gross profit increased $21.8 million to $389.1 million in 2001 from $367.3
million in the prior year. Total variable margin in the retail segment
increased, in line with the volume and net sales changes. Gross profit was also
favorably impacted by improved plant efficiencies and one-time gains associated
with the cancellation of an unprofitable contract production agreement and
renegotiation of employee benefits at the West Seneca, New York facility, offset
in part by increased consulting costs associated with obtaining the plant
efficiencies.

     Brokerage and distribution expenses decreased $0.6 million to $85.0 million
in 2001 from $85.6 million in 2000. This decrease was primarily due to a
reduction in retail brokerage expense, as a result of the Company's
consolidation to a national retail broker in the second quarter of 2000. During
the second quarter of 2001, this broker filed for bankruptcy and the business
was absorbed by Acosta, which the Company selected as its new national retail
broker. The change in brokers did cause some disruption on selected brands, but
did not have a significant impact on overall results.

     Trade promotions expense increased to $133.7 million in 2001 from $126.4
million in 2000. This increase was primarily in the retail segment and due in
part to the unit sales volume growth. In addition, per unit promotional spending
increased on bagels and increased performance-based trade promotions on seafood
supported sales during Lent, where lower levels of up-front discounts to
customers, reflected in net sales and gross profit, were given in 2001.
Offsetting these increases in part, spending on retail baking mixes and
frostings along with syrups was reduced from the prior year, as a result of
better trade promotion planning, more efficient spending by tying multiple
products into promotions and higher prior year syrup spending to support
aggressive programs and new product introductions.

     Consumer marketing expenses were $30.0 million in 2001 as compared to $31.9
million in 2000. This decrease was due to the higher levels of spending in 2000
on breakfast and syrup products to support product introduction and placement of
coupons. These were offset in part by higher spending in 2001, principally for
seafood, bagels and baking mixes and frosting, supporting the brands and new
product introductions.

     Selling, general and administrative expenses increased to $45.8 million in
2001 from $36.8 million in 2000 primarily due to the increase in expenses for
new product trials and consulting to support product, production and internal
system initiatives along with the salary, relocation and related personnel costs
associated with an increase in the number of corporate employees.

                                       21

<PAGE>

     Other financial, legal, accounting, consolidation and transition income
(expense). During the second quarter of 2001, the Company recorded a pretax gain
of approximately $3.8 million gain related to the receipt of shares from former
management in excess of amounts required to be distributed. In addition, the
Company recorded additional reserves of approximately $0.7 million related to
unused office space in Columbus, Ohio subsequent to the administrative
consolidation in 2000. See Note 3 to the financial statements of Part I, Item 1
of this Form 10-Q.

     During 2000, as a result of the investigation into the Company's past
accounting practices, the resulting restatement of its financial statements,
litigation, governmental proceedings, defaults under its loan agreements and
related matters, the Company incurred financial, legal and accounting expenses,
charges to obtain waivers on its events of default and charges related to
amending its financing facilities. Such costs, which totaled $41.3 million for
the nine months ended September 30, 2000, were expensed when incurred by the
Company and included a non-cash $17.1 million charge associated with the
issuance of common stock to certain holders of the Company's senior subordinated
debt, as discussed in Note 3 to the financial statements in Part I, Item 1 of
this Form 10-Q. In addition, during 2000, the Company recorded a reserve and
charge to expense of approximately $6.6 million, for costs associated with the
closing of its administrative office in Columbus, Ohio and incurred $2.1 million
in transition expenses, primarily due to the integration of the Chef's Choice(R)
and Lender's(R) businesses. These expenses represented one-time costs incurred
to integrate acquired businesses and operations.

     Operating income increased to $64.1 million in 2001 from $4.4 million in
2000. Operating income in both 2001 and 2000 were affected by other financial,
legal, accounting, consolidation and transition items. Before giving effect to
these items, operating income increased $6.7 million in 2001.

     Interest and other financing expenses. The aggregate of net interest income
and expense, amortization of loan fees and other bank and financing expenses
increased to $93.2 million in 2001 from $83.6 million in 2000. The increase was
due primarily to costs associated with the accounts receivable sale facility and
with debt agreement amendments along with recording an additional $11.3 million
of expense to recognize the net liability to the Company of two derivative
instruments which were not effective as hedges as required by FAS 133. See Note
8 to the financial statements included in Part I, Item 1. of this Form 10-Q.
This was offset in part by lower interest costs resulting from lower levels of
outstanding debt and lower interest rates on variable rate debt as compared to
the prior year.

     Income tax benefit. The income tax benefit recorded in 2001 and 2000 was
31.4% and 36.0%, respectively, of the pretax loss.

     Cumulative effect of change in accounting. Effective January 1, 2000, the
Company adopted the consensus reached in EITF 00-14, Accounting for Certain
Sales Incentives. See Note 1 to the financial statements in Part I, Item 1 of
this Form 10-Q.

Liquidity and Capital Resources

     For the nine months ended September 30, 2001 the Company generated $61.4
million from operating activities compared to the nine months ended September
30, 2000, when $39.0 million of cash was used in operations. The increase in
cash provided in 2001 was primarily a result of the lower loss incurred during
the period, including a $53.0 million change in other financial, legal,
accounting, consolidation and transition items from 2000 and a significant
change in funds related to working capital changes. As of September 30, 2001,
the Company had received a net $35.0 million from the sale of accounts
receivable. The agreement to sell accounts receivable has been used to provide
needed cash.

     Investing activities during the nine months ended September 30, 2001 used
$14.4 million for asset additions, including the purchase of a facility in St.
Elmo, Illinois during the third quarter of 2001. The prior year included the use
of cash to complete the 1999 purchase of Sea Coast Foods, Inc.

     During the nine months ended September 30, 2001, financing activities used
cash of $44.4 million, primarily for scheduled debt repayments and a $20 million
reduction in revolver borrowings. In 2000, the Company

                                       22

<PAGE>

received $15 million from its issuance of preferred stock in connection with the
resolution of the covenant defaults on its senior subordinated debt. In
addition, the Company repaid $19.7 million in principal on its senior secured
term debt and borrowed $65.0 million on the revolving facility to fund its
operations, capital expenditures and its repayment of borrowings.

     In February, 2001, the Company's senior secured debt agreement was amended
to provide revised financial covenants for 2001, to affirm the ability of the
Company to continue to sell up to $60 million of accounts receivable, to
increase the interest rate spread on borrowings by 0.25% and to provide for a
further increase in the interest rate spread of 0.25% if asset sale proceeds and
related repayments of debt between February 1, 2001 and June 30, 2001 were less
than $90 million. In addition, the accounts receivable sale facility was amended
to extend the termination date to March 31, 2002 and effectively reduce the
available facility to $46 million as of March 31, 2001 and $36 million as of
December 31, 2001. The Company did not complete any asset sales prior to June
30, 2001. As a result, the interest rate on its floating rate senior debt
facility increased 0.25% on July 1, 2001, which will offset in part the benefit
the Company has been receiving from the decline in interest rates during 2001.

     During the third quarter of 2001, the Company's senior secured debt
agreement was amended to provide that for third quarter covenant purposes, the
proceeds from an asset sale anticipated to occur in October would be applied as
if it had occurred in the third quarter. In the event that the asset sale did
not occur, the lending agreement was further amended to reset the senior
leverage covenant, in return for a contingent fee, in the event that the Company
would not otherwise have met its senior leverage covenant. The asset sale did
not occur and the amendment was necessary to keep the company within the senior
leverage covenant. Consequently, the Company paid a $428,000 fee in October to
reset the third quarter covenant.

     As of September 30, 2001, the Company had $30.2 million available for
borrowings under its revolving credit facility. Cash available under this
facility fluctuates significantly on a daily basis.

     The Company is significantly leveraged. At September 30, 2001, the Company
had outstanding approximately $1.1 billion in aggregate principal amount of
indebtedness for borrowed money. The degree to which the Company is leveraged
results in significant cash interest expense and principal repayment obligations
and such interest expense may increase with respect to its senior debt based
upon changes in prevailing interest rates. This leverage may, among other
things, affect the ability of the Company to obtain additional financing, or
adjust to changing market conditions. In addition, the Company is currently
limited in its ability to pursue additional acquisitions.

     Management of the Company believes that cash generated from operations and
cash available to the Company from the sale of accounts receivable and
borrowings under the revolving credit agreement will be adequate to fund its
operating and capital expenditure requirements and its debt repayment
obligations.

Impact of New Accounting Pronouncements

     In April, 2001, the Emerging Issues Task Force reached consensus on EITF
No. 00-25, Accounting for Consideration from a Vendor to a Retailer in
Connection with the Purchase or Promotion of the Vendor's Products. Although the
Company has not yet quantified the impact of this change in accounting,
management expects that adoption of this consensus will require that certain
expenses, currently classified as trade promotion expense, will be required to
be reclassified as reductions of net sales, with no effect on the reported
amount of operating income. Adoption of the change will be required in financial
statements issued by the Company for 2002, and prior periods' financial
statements will be restated to conform with the new presentation.

     In late June 2001, the FASB approved the issuance of FAS 142, Goodwill and
Other Intangible Assets which, for the Company, will be required to be adopted
as of January 1, 2002. Although the Company has not yet quantified the impacts,
management expects that the adoption of the new pronouncement will result in
decreases in the ongoing amount of amortization of goodwill and other intangible
assets reflected in the Company's statements of operations in future periods.

                                       23

<PAGE>

Interest Rate Agreements

     At September 30, 2001, the Company was party to three interest rate swap
and collar agreements. Risks associated with the interest rate swap and collar
agreements include those associated with changes in the market value and
interest rates. The Company is generally a beneficiary of lower interest rates.
To reduce the risk associated with rising interest rates, the Company entered
into swap and collar agreements, which have the effect of fixing the interest
rates or limiting this risk on a portion of its variable rate debt. Conversely,
when interest rates decline, the Company benefits, but on a reduced basis on the
amounts subject to these interest rate agreements. Taken in the context of the
Company's entire debt financing portfolio, which has benefited from the
significant declines in interest rates that have occurred during 2001,
management considers the potential loss in future earnings and cash flows
attributable to the interest rate swap and collar agreements over the life of
the instruments to not be material. See Note 8 to the financial statements in
Part I, Item 1 of this Form 10-Q.

Forward-Looking Statements

     The Private Securities Litigation Reform Act of 1995 provides a safe harbor
for forward-looking statements made by or on behalf of the Company. The Company
and its representatives may from time to time make written or oral statements
that are "forward-looking" including statements contained in this report and
other filings with the Securities and Exchange Commission and in reports to the
Company's stockholders. Certain statements, including, without limitation,
statements containing the words "believes," "anticipates," "intends," "expects,"
"estimates" and words of similar import constitute "forward-looking statements"
and involve known and unknown risk, uncertainties and other factors that may
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors could
include, among others, the following: the availability of funding for
operations; the ability of the Company to service its high level of
indebtedness; the ability of new management to implement a successful strategy;
the ability of the Company to successfully integrate the Company's brands;
whether the Company can increase its competitive position in the marketplace;
the ability of the Company to reduce expenses; the ability of the Company to
successfully introduce new products; the Company's success in increasing volume;
the effectiveness of the Company's advertising campaigns; the ability of the
Company to successfully leverage its brands; the ability of the Company to
secure new, effective distribution channels; the ability of the Company to grow
and maintain its market share; the actions of the Company's competitors; general
economic and business conditions; industry trends; demographics; raw material
costs; integration of acquired businesses into the Company; terms and
development of capital; the ability of the Company to realize the value of its
deferred tax assets; the outcome of the Securities Actions; and changes in, or
the failure or inability to comply with, governmental rules and regulations,
including, without limitation, FDA and environmental rules and regulations. See
"--Liquidity and Capital Resources." Given these uncertainties, undue reliance
should not be placed on such forward-looking statements. Unless otherwise
required by law, the Company disclaims an obligation to update any such factors
or to publicly announce the results of any revisions to any forward-looking
statements contained herein to reflect future events or developments.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The Company has entered into interest rate swap and collar agreements for
non-trading purposes. Risks associated with the interest rate swap and collar
agreements include those associated with changes in the market value and
interest rates. The Company is generally a beneficiary of lower interest rates.
To reduce the risk associated with rising interest rates, the Company entered
into swap and collar agreements, which have the effect of fixing the interest
rates or limiting this risk on a portion of its variable rate debt. Conversely,
when interest rates decline, the Company benefits, but on a reduced basis on the
amounts subject to these interest rate agreements. Taken in the context of the
Company's entire debt financing portfolio, which has benefited from the
significant declines in interest rates that have occurred during 2001,
management considers the potential loss in future earnings and cash flows
attributable to the interest rate swap and collar agreements over the life of
the instruments not to be material. See Note 8 to the financial statements in
Part I, Item 1 of this Form 10-Q.

                                       24

<PAGE>

PART II--OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

     During 2000, the Company was served with eighteen complaints in purported
class action lawsuits filed in the U.S. District Court for the Northern District
of California. The complaints received by the Company alleged that, among other
things, as a result of accounting irregularities, the Company's previously
issued financial statements were materially false and misleading and thus
constituted violations of federal securities laws by the Company and the
directors and officers who resigned on February 17, 2000 (Ian R. Wilson, James
B. Ardrey, Ray Chung and M. Laurie Cummings). The actions (the "Securities
Actions") alleged that the defendants violated Sections 10(b) and/or Section
20(a) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder. The
Securities Actions complaints sought damages in unspecified amounts. These
Securities Actions purported to be brought on behalf of purchasers of the
Company's securities during various periods, all of which fell between October
28, 1998 and April 2, 2000.

     On April 14, 2000, certain of the Company's current and former directors
were named as defendants in a derivative lawsuit filed in the Superior Court of
the State of California, in the County of San Francisco, alleging breach of
fiduciary duty, mismanagement and related causes of action based upon the
Company's restatement of its financial statements. The case was then removed to
federal court in San Francisco.

     On January 16, 2001 the Company announced that it reached a preliminary
agreement to settle the securities class action and derivative lawsuits pending
against the Company and its former management team in the U.S. District Court in
the Northern District of California. On March 1, 2001, Stipulations of
Settlement for the Securities class action and derivative lawsuits were entered
into in the U.S. District Court in the Northern District of California to fully
resolve, discharge and settle the claims made in each respective. On May 11,
2001, the United States District Court for the Northern District of California
approved the settlement.

     Under the terms of the agreement, Aurora will pay the class members $26
million in cash and $10 million in common stock of the Company. On March 2, 2001
the Company entered into definitive agreements with certain members of former
management to transfer to the Company between approximately 3 million and 3.6
million shares of common stock of the Company, in consideration for a resolution
of any civil claims that the Company may have, and partially conditioned upon
future events and circumstances. The cash component of the settlement will be
funded entirely by the Company's insurance. As of November 2, 2001, with respect
to the common stock component of the settlement, the stock received from former
management would be sufficient, at current share prices, to satisfy Aurora's
obligation without issuing additional shares. The actual number of shares of
common stock of the Company needed to fund this component will be based on
average share prices, some of which will be determined at later dates. However,
members of the class had the opportunity to opt out of the settlement agreement,
and bring separate claims against the Company. Separate claims representing an
immaterial number of shares did opt out of the settlement agreement.

     Pursuant to the settlement and the definitive agreements, the Company
received 3,051,303 shares of its common stock from former management. During
May, 2001, the Company distributed 465,342 shares of its common stock as
settlement for the first $2.5 million of the common stock component of the
settlement. The number of shares of common stock to be distributed as settlement
for the remaining $7.5 million portion of the common stock component of the
settlement will be determined at a later date.

     In addition, the Company has agreed to continue to implement certain
remedial measures, including the adoption of an audit committee charter, the
reorganization of the Company's finance department, the establishment of an
internal audit function and the institution of a compliance program, as
consideration for resolution of the derivative litigation.

     The staff of the Securities and Exchange Commission (the "SEC") and the
United States Attorney for the Southern District of New York (the "U.S.
Attorney") also initiated investigations relating to the events that resulted in
the restatement of the Company's financial statements for prior periods ("Prior
Events"). The SEC and U.S. Attorney requested that the Company provide certain
documents relating to the Company's historical financial statements. On
September 5, 2000, the Company received a subpoena from the SEC to produce
documents in

                                       25

<PAGE>

connection with the Prior Events. The SEC also requested certain information
regarding some of the Company's former officers and employees, correspondence
with the Company's auditors and documents related to financial statements,
accounting policies and certain transactions and business arrangements.

     On January 23, 2001 the U.S. Attorney announced indictments alleging
financial accounting fraud against members of former management and certain
former employees of the Company. The U.S. Attorney did not bring charges against
the Company.

     In a cooperation agreement with the U.S. Attorney, the Company confirmed
that it would continue to implement an extensive compliance program, which will
include an internal audit function, a corporate code of conduct, a comprehensive
policies and procedures manual, employee training and education on policies and
procedures and adequate disciplinary mechanisms for violations of policies and
procedures.

     In addition, the Company consented to the entry of an order by the SEC
requiring compliance with requirements for accurate and timely reporting of
quarterly and annual financial results, and the maintenance of internal control
procedures in connection with a civil action by the SEC concerning accounting
irregularities at the Company in 1998 and 1999. Aurora did not either admit or
deny any wrongdoing, and the SEC did not seek any monetary penalty. The Company
also committed to continue to cooperate with the SEC in connection with its
actions against certain former members of management and former employees.

     The Company is also subject to litigation in the ordinary course of
business.

     In the opinion of management, the ultimate outcome of any existing
litigation would not have a material adverse effect on the Company's financial
condition, results of operations or cash flows.

                                       26

<PAGE>

          ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

  (a) Exhibits

              Exhibit
              -------
               Number                           Exhibit
               ------                           -------

                10.47      Amendment and Waiver, dated as of October 1, 2001, to
                           the Fifth Amended and Restated Credit Agreement dated
                           as of November 1, 1999 and entered into by and among
                           Aurora Foods Inc., as Borrower, the Lenders listed
                           therein, the Chase Manhattan Bank, as Administrative
                           Agent for the Lenders, National Westminster Bank PLC,
                           as Syndication agent, and UBS AG, Stamford Branch, as
                           Documentation agent.

  (b) Reports on Form 8-K

                None

                                       27

<PAGE>

SIGNATURES

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

                                         AURORA FOODS INC.

                                         By:   /s/ Christopher T. Sortwell
                                               ---------------------------

                                               Christopher T. Sortwell
                                               Chief Financial Officer
                                               (Duly Authorized Officer,
                                               Principal Financial Officer and
                                               Principal Accounting Officer)

Date: November 13, 2001

                                       28

<PAGE>

                                  EXHIBIT INDEX

               Exhibit
               -------
               Number                          Exhibit
               ------                          -------

                10.47      Amendment and Waiver, dated as of October 1, 2001, to
                           the Fifth Amended and Restated Credit Agreement dated
                           as of November 1, 1999 and entered into by and among
                           Aurora Foods Inc., as Borrower, the Lenders listed
                           therein, the Chase Manhattan Bank, as Administrative
                           Agent for the Lenders, National Westminster Bank PLC,
                           as Syndication agent, and UBS AG, Stamford Branch, as
                           Documentation agent.