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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 March 30, 2003



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 1-16699



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OVERHILL FARMS, INC.

(Exact name of registrant as specified in its charter)



|Nevada                                                         |  | 75-2590292                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification Number)



2727
East Vernon Avenue

Vernon, California 90058

(Address of principal executive offices)



(323) 582-9977

(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 issuers classes of common stock, as of the latest practicable date.



Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange
Act.).    Yes ̈No  x



|Common Stock, $.01 par value |  | 12,338,797                
|---------------------------- |  | --------------------------
|                             |  | Outstanding at May 5, 2003





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OVERHILL FARMS, INC.

FORM 10-Q

QUARTER ENDED MARCH 30, 2003



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TABLE OF CONTENTS



|                                                                                             
|---------------------------------------------------------------------------------------------
|PART I  FINANCIAL INFORMATION                                                               
|                                                                                             
|Item 1. Financial Statements                                                                 
|                                                                                             
|Consolidated Condensed Balance Sheets as of March 30, 2003                                   
|                                                                                             
|Consolidated Condensed Statements of Operations For the Three Months Ended March 30, 2003    
|                                                                                             
|Consolidated Condensed Statements of Operations For the Six Months Ended March 30, 2003      
|                                                                                             
|Consolidated Condensed Statements of Cash Flows For the Six Months Ended March 30, 2003      
|                                                                                             
|Notes to Consolidated Condensed Financial Statements                                         
|                                                                                             
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                                                             
|Item 3. Quantitative and Qualitative Disclosures about Market Risk                           
|                                                                                             
|Item 4. Controls and Procedures                                                              
|                                                                                             
|PART II  OTHER INFORMATION                                                                  
|                                                                                             
|Item 1. Legal Proceedings                                                                    
|                                                                                             
|Item 3. Defaults Upon Senior Securities                                                      
|                                                                                             
|Item 6. Exhibits and Reports on Form 8-K                                                     
|                                                                                             
|Signatures                                                                                   
|                                                                                             
|Certifications                                                                               





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OVERHILL FARMS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS



Assets



|                                                                                       |  | March 30, 2003 |            |   | September 29, 2002 |  
|-------------------------------------------------------------------------------------- |  | -------------- | ---------- | - | ------------------ | -
|                                                                                       |  | (Unaudited)    |            |   | (Note 2)           |  
|Current assets:                                                                        |  |                |            |   |                    |  
|Cash                                                                                   |  | $              | 10,600     |   |                    | $
|Accounts receivable, net of allowance for doubtful accounts of $381,331 and
$102,285   |  |                | 10,438,042 |   |                    |  
|Inventories                                                                            |  |                | 13,096,203 |   |                    |  
|Prepaid expenses and other                                                             |  |                | 3,267,726  |   |                    |  
|                                                                                       |  |                |            |   |                    |  
|Total current assets                                                                   |  |                | 26,812,571 |   |                    |  
|                                                                                       |  |                |            |   |                    |  
|                                                                                      
|Property and equipment                                                                 |  |                | 20,907,498 |   |                    |  
|Less accumulated depreciation                                                          |  |                | (7,393,432 | ) |                    |  
|                                                                                       |  |                |            |   |                    |  
|                                                                                       |  |                | 13,514,066 |   |                    |  
|                                                                                       |  |                |            |   |                    |  
|                                                                                      
|Other assets:                                                                          |  |                |            |   |                    |  
|Excess of cost over fair value of net assets acquired                                  |  |                | 12,188,435 |   |                    |  
|Deferred financing costs, net of accumulated amortization of $2,212,280 and
$1,395,829 |  |                | 2,839,635  |   |                    |  
|Other                                                                                  |  |                | 1,720,008  |   |                    |  
|                                                                                       |  |                |            |   |                    |  
|                                                                                       |  |                | 16,748,078 |   |                    |  
|                                                                                       |  |                |            |   |                    |  
|                                                                                      
|Total assets                                                                           |  | $              | 57,074,715 |   |                    | $
|                                                                                       |  |                |            |   |                    |  



The
accompanying notes are an integral part

of these consolidated financial statements



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##### Table of Contents



OVERHILL
FARMS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS (continued)



Liabilities and Shareholders Equity



|                                                                                                                     |  | March 30, 2003 |            |   | September 29, 2002 |  
|-------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | - | ------------------ | -
|                                                                                                                     |  | (Unaudited)    |            |   | (Note 2)           |  
|Current liabilities:                                                                                                 |  |                |            |   |                    |  
|Accounts payable, primarily trade                                                                                    |  | $              | 14,152,369 |   |                    | $
|Accrued liabilities                                                                                                  |  |                | 3,261,952  |   |                    |  
|Current maturities of long-term debt                                                                                 |  |                | 13,221,702 |   |                    |  
|                                                                                                                     |  |                |            |   |                    |  
|Total current liabilities                                                                                            |  |                | 30,636,023 |   |                    |  
|                                                                                                                    
|Deferred taxes                                                                                                       |  |                | 265,127    |   |                    |  
|Long-term debt, less current maturities                                                                              |  |                | 24,221,369 |   |                    |  
|                                                                                                                     |  |                |            |   |                    |  
|Total liabilities                                                                                                    |  |                | 55,122,519 |   |                    |  
|                                                                                                                     |  |                |            |   |                    |  
|                                                                                                                    
|Shareholders equity:                                                                                                |  |                |            |   |                    |  
|Series A Preferred stock, $0.01 par value, authorized 50,000,000 shares, issued and
outstanding, 23.57 shares        |  |                |           |   |                    |  
|Common stock, $0.01 par value, authorized 100,000,000 shares, issued and outstanding
12,338,797 and 9,400,828 shares |  |                | 123,388    |   |                    |  
|Additional paid-in capital                                                                                           |  |                | 7,920,834  |   |                    |  
|Warrants to purchase common stock                                                                                    |  |                | 400        |   |                    |  
|Receivable from Parent                                                                                               |  |                |           |   |                    |  
|Retained earnings (accumulated deficit)                                                                              |  |                | (6,092,426 | ) |                    |  
|                                                                                                                     |  |                |            |   |                    |  
|Total shareholders equity                                                                                           |  |                | 1,952,196  |   |                    |  
|                                                                                                                     |  |                |            |   |                    |  
|Total liabilities and shareholders equity                                                                           |  | $              | 57,074,715 |   |                    | $
|                                                                                                                     |  |                |            |   |                    |  



The
accompanying notes are an integral part

of these consolidated financial statements



-3-



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##### Table of Contents



OVERHILL FARMS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)



|                                             |  | For the Three Months Ended |           
|-------------------------------------------- |  | -------------------------- | ----------
|                                             |  | March 30, 2003             |           
|Net revenues                                 |  | $                          | 33,428,012
|Cost of sales                                |  |                            | 29,692,780
|                                             |  |                            |           
|Gross profit                                 |  |                            | 3,735,232 
|                                            
|Selling, general and administrative expenses |  |                            | 4,908,576 
|                                             |  |                            |           
|                                            
|Operating income (loss)                      |  |                            | (1,173,344
|                                             |  |                            |           
|                                            
|Other income (expense):                      |  |                            |           
|Interest expense                             |  |                            | (1,243,187
|Amortization of deferred financing costs     |  |                            | (504,724  
|Other income (expense)                       |  |                            | (97,360   
|                                             |  |                            |           
|                                            
|Total other expenses                         |  |                            | (1,845,271
|                                             |  |                            |           
|                                            
|Income (loss) before income taxes            |  |                            | (3,018,615
|                                            
|Income tax provision (benefit)               |  |                            | (1,211,612
|                                             |  |                            |           
|                                            
|Net income (loss)                            |  | $                          | (1,807,003
|                                             |  |                            |           
|                                            
|Net income (loss) per share:                 |  |                            |           
|                                            
|Basic                                        |  | $                          | (.15      
|                                             |  |                            |           
|                                            
|Diluted                                      |  | $                          | (.15      
|                                             |  |                            |           



The
accompanying notes are an integral part

of these consolidated financial statements



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##### Table of Contents



OVERHILL FARMS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)



|                                             |  | For the Six Months Ended |           
|-------------------------------------------- |  | ------------------------ | ----------
|                                             |  | March 30, 2003           |           
|Net revenues                                 |  | $                        | 71,559,251
|Cost of sales                                |  |                          | 62,550,447
|                                             |  |                          |           
|Gross profit                                 |  |                          | 9,008,804 
|                                            
|Selling, general and administrative expenses |  |                          | 9,755,229 
|                                             |  |                          |           
|                                            
|Operating income (loss)                      |  |                          | (746,425  
|                                             |  |                          |           
|                                            
|Other income (expense):                      |  |                          |           
|Interest expense                             |  |                          | (2,332,445
|Amortization of deferred financing costs     |  |                          | (816,451  
|Other income (expense)                       |  |                          | (202,851  
|                                             |  |                          |           
|                                            
|Total other expenses                         |  |                          | (3,351,747
|                                             |  |                          |           
|                                            
|Income (loss) before income taxes            |  |                          | (4,098,172
|                                            
|Income tax provision (benefit)               |  |                          | (1,644,925
|                                             |  |                          |           
|                                            
|Net income (loss)                            |  | $                        | (2,453,247
|                                             |  |                          |           
|                                            
|Net income (loss) per share:                 |  |                          |           
|                                            
|Basic                                        |  | $                        | (.22      
|                                             |  |                          |           
|                                            
|Diluted                                      |  | $                        | (.22      
|                                             |  |                          |           



The
accompanying notes are an integral part

of these consolidated financial statements



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OVERHILL FARMS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                         |  | For the Six Months Ended |           
|---------------------------------------------------------------------------------------- |  | ------------------------ | ----------
|                                                                                         |  | March 30, 2003           |           
|Operating Activities:                                                                    |  |                          |           
|Net income (loss)                                                                        |  | $                        | (2,453,247
|Adjustments to reconcile net income (loss) to net cash provided by operating
activities: |  |                          |           
|Depreciation and amortization                                                            |  |                          | 1,465,114 
|Provision for doubtful accounts                                                          |  |                          | 279,046   
|Deferred tax provision (benefit)                                                         |  |                          | (1,644,925
|Changes in:                                                                              |  |                          |           
|Accounts receivable                                                                      |  |                          | 2,733,015 
|Inventories                                                                              |  |                          | 5,393,327 
|Prepaid expenses and other                                                               |  |                          | (584,513  
|Accounts payable                                                                         |  |                          | 383,478   
|Accrued liabilities                                                                      |  |                          | 1,353,513 
|                                                                                         |  |                          |           
|                                                                                        
|Net cash provided by operating activities                                                |  |                          | 6,924,808 
|                                                                                         |  |                          |           
|                                                                                        
|Investing Activities:                                                                    |  |                          |           
|Net additions to property and equipment                                                  |  |                          | (4,733,723
|                                                                                         |  |                          |           
|                                                                                        
|Net cash used in investing activities                                                    |  |                          | (4,733,723
|                                                                                         |  |                          |           



The
accompanying notes are an integral part

of these consolidated financial statements



-6-



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OVERHILL
FARMS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (continued)

(Unaudited)



|                                                    |  | For the Six Months Ended |           
|--------------------------------------------------- |  | ------------------------ | ----------
|                                                    |  | March 30, 2003           |           
|Financing Activities:                               |  |                          |           
|Net borrowings on line of credit arrangements       |  | $                        | 623,809   
|Principal payments on long-term debt                |  |                          | (1,162,742
|Net advances to or on behalf of Parent              |  |                          | (946,168  
|Deferred financing costs                            |  |                          | (703,499  
|                                                    |  |                          |           
|                                                   
|Net cash provided by (used in) financing activities |  |                          | (2,188,600
|                                                    |  |                          |           
|                                                   
|Net increase (decrease) in cash                     |  |                          | 2,485     
|Cash at beginning of period                         |  |                          | 8,115     
|                                                    |  |                          |           
|                                                   
|Cash at end of period                               |  | $                        | 10,600    
|                                                    |  |                          |           
|                                                   
|Supplemental Schedule of Cash Flow Information:     |  |                          |           
|Cash paid during the period for:                    |  |                          |           
|Interest                                            |  | $                        | 1,661,611 
|Income taxes                                        |  | $                        |          



The
accompanying notes are an integral part

of these consolidated financial statements



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OVERHILL
FARMS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (continued)

(Unaudited)



Supplemental Schedule of Noncash Investing and Financing Activities:



The Company, effective upon the completion of its spin-off, netted a total of approximately $11.5 million, consisting of all
accrued income taxes due to and the unpaid receivable due from its former Parent, against retained earnings.



During the six months ended March 30, 2003, the Company issued a total of 2,937,987 shares of its common stock, for nominal consideration, in connection with the exercise of warrants and dilution
protection rights granted to its senior subordinated lender in prior fiscal periods.



During the six months ended March 31, 2002, the Company issued 23.57 shares of a newly created Series A Preferred Stock having an estimated value of $750,000 as consideration for certain consents and additional monitoring
costs and expenses to be incurred by the Companys senior subordinated lender, LLCP.



The accompanying notes are an integral part

of these consolidated financial
statements.



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OVERHILL FARMS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)



|1. |  | NATURE OF BUSINESS AND ORGANIZATIONAL MATTERS
|-- |  | ---------------------------------------------



Overhill Farms, Inc. (the Company or Overhill Farms) is a producer of high-quality entrees, plated meals, meal components, soups, sauces,
and poultry, meat and fish specialties. From May 5, 1995 through October 29, 2002, the Company was a majority-owned subsidiary of TreeCon Resources, Inc., formerly Overhill Corporation and Polyphase Corporation (the Parent). The Parents
ownership of the Company during that period was subject to various warrants to purchase Overhill Farms common stock, which had been issued to certain lenders to the Company. On October 29, 2002, TreeCon Resources, Inc. distributed to its
shareholders, in the form of a tax-free dividend, all of its ownership of Overhill Farms.



In October 2002, in connection with the above mentioned spin-off transaction, the Companys Board of Directors authorized a 12,010-shares-for-1 stock split. Share and per share data as of and for
all periods presented herein have been restated to reflect the stock split.



|2. |  | BASIS OF PRESENTATION
|-- |  | ---------------------



The consolidated financial statements include the accounts of Overhill Farms and its wholly owned subsidiary, Overhill L.C. Ventures, Inc.
All material intercompany accounts and transactions are eliminated. Certain prior year amounts have been reclassified to conform with the current year presentation.



The financial statements included herein have been prepared by the Company, without an audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. The Company believes that the disclosures are adequate to make the information presented not misleading. The information presented reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods when read in conjunction with the financial statements and the notes thereto included in the Companys latest financial
statements filed as part of its Form 10-K for the year ended September 29, 2002.



The consolidated condensed balance sheet at September 29, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by
accounting principles generally accepted in the United States for complete financial statements.



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|3. |  | INVENTORIES
|-- |  | -----------



Inventories are summarized as follows:



|                 |  | March 30, 2003 |            | September 29, 2002
|---------------- |  | -------------- | ---------- | ------------------
|Raw ingredients  |  | $              | 5,474,513  |                   
|Finished product |  |                | 6,080,465  |                   
|Packaging        |  |                | 1,541,225  |                   
|                 |  |                |            |                   
|                 |  | $              | 13,096,203 |                   
|                 |  |                |            |                   



|4. |  | LONG-TERM DEBT
|-- |  | --------------



In November 1999, the Company refinanced substantially all of its existing debt. The total facility amounted to $44 million, consisting of
a $16 million line of credit, expiring in November 2002, provided by Union Bank of California, N.A. (Union Bank) together with $28 million in the form of a five-year term loan provided by Levine Leichtman Capital Partners II, L.P. (LLCP). Both of
these agreements have subsequently been amended on multiple occasions as discussed in the Companys annual financial statements included in its Form 10-K for the year ended September 29, 2002. Additionally, the Company issued a term note
payable to Union Bank in connection with an acquisition that occurred in August 2000.



At March 30, 2003, amounts outstanding under these arrangements payable to Union Bank were $12.6 million on the revolving line of credit and $850,000 on term loans, and $24.7 million payable to LLCP on
the term loan.



The Companys revolving line
of credit, senior subordinated note payable and term loan agreements all contain various financial covenants including restrictions on changes in control, capital expenditures, minimum EBITDA and net worth levels, specified debt service and
debt-to-equity ratios, and prohibitions on certain loans, advances and dividend payments. As of March 30, 2003, the Company was not in compliance with certain financial covenants with respect to its financing arrangements with both Union Bank and
LLCP.



Effective April 4, 2003, the Company
reached a bridge financing agreement with LLCP whereby, with the consent of Union Bank, LLCP purchased, for total consideration of $3.025 million, $3.0 million principal amount of term notes, bearing interest at 15%, which are due and payable
January 30, 2004, together with 2,466,759 shares of the Companys common stock. In connection with this transaction, a debt discount of approximately $1.65 million will be recorded and amortized over a 10-month period ending in January 2004.
Also in connection therewith, each of Union Bank and LLCP agreed to waive all events of noncompliance that were in existence as of the effective date of the bridge financing. The issuance of the shares of common stock is subject to the approval of a
listing application for the shares by the American Stock Exchange, of which there can be no assurance. The Companys securities purchase agreement with LLCP, as amended and restated in April 2003, provides that the Company must issue the shares
to LLCP by April 24, 2003. Subsequent to the completion of the transaction, the American Stock Exchange indicated that, under Amex rules, shareholder approval is required as a condition for Amex approval of the Companys additional listing
application for the issuance of the shares to LLCP. Accordingly, the Company has agreed to call a special meeting of its shareholders to authorize the transaction. LLCP and the Company have agreed that, in light of the Amex rules, and in
consideration of the payment by the Company to LLCP of an amendment fee of $125,000, the agreement be amended to allow the Company until June 30, 2003, and upon proper notification to LLCP by the Company, until July 20, 2003, to secure shareholder
approval. Although there can be no assurance that the Company will receive the necessary approvals, the Company believes that the necessary approvals can be obtained during that period.



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##### Table of Contents



Effective
April 16, 2003, Pleasant Street Investors, LLC, an affiliate of LLCP, acquired the senior secured loans previously made by Union Bank, and the Company and Pleasant Street Investors amended and restated the senior secured loan arrangements on
mutually acceptable terms and conditions. As a result of the repayment of Union Bank, the Company will be writing off unamortized deferred financing costs of approximately $500,000 related to the arrangements with the Bank. Under the new agreement,
amounts owing to Union Bank on the effective date, $12.117 million, plus additional amounts advanced to the Company by Pleasant Street Investors, $1.883 million, together with the amounts owing to LLCP under the bridge financing agreement described
above, $3.0 million, were combined into a new $17.0 million Term Loan A, bearing interest at no less than 10%, subject to periodic adjustments, and due and payable on November 30, 2003. Additional amounts advanced by Pleasant Street Investors to the
Company as of the effective date amounted to $5.0 million and are evidenced by Term Loan B, bearing interest at 15%, and is due and payable January 30, 2004. The Company used $3.0 million of proceeds from Term Loan A to repay the outstanding
principal amounts of the term note issued to LLCP on April 4, 2003.



Due to the fact that a substantial portion of the Companys financing matures within the next twelve months (Term Loan A in the amount of $17.0 million is due November 30, 2003, and Term Loan B in the amount of $5.0
million is due January 31, 2004, as described above), the Company is actively seeking new financing arrangements both from LLCP, the Companys current lender, as well as other potential sources of financing. No assurances can be made that such
financing arrangements would be obtained by the Company on substantially the same terms and conditions, or at all.



As of April 4, 2003, the Company was in compliance with all of its amended financial covenants. The Company believes, based upon
historical performance, current results of operations for the six months ended March 30, 2003 and forecasted performance for the remainder of fiscal 2003, that it is probable that the Company will be in compliance with all of its revised financial
and other covenant requirements. Accordingly, the Companys senior subordinated debt, which matures in November 2004, has been classified as a long-term obligation in the accompanying consolidated balance sheet as of March 30, 2003. In the
future, the failure of the Company to achieve certain revenue, expense and profitability forecasts could result in a violation of the amended financial covenants under its financing arrangements, which could have a material adverse effect on the
Companys financial condition, results of operations or cash flows.



|5. |  | PER SHARE DATA
|-- |  | --------------



The following table sets forth the calculation of earnings (loss) per share for the periods presented:



|                                                      |  | For the Three Months Ended
|----------------------------------------------------- |  | --------------------------
|                                                      |  | March 30, 2003            
|Numerator:                                            |  |                           
|Net income (loss) attributable to common shareholders |  | $                         
|                                                      |  |                           
|                                                     
|Denominator:                                          |  |                           
|Denominator for basic earnings                        |  |                           
|Per share  weighted average shares                   |  |                           
|                                                      |  |                           
|Effect of dilutive securities:                        |  |                           
|Warrants                                              |  |                           
|Dilution protection shares                            |  |                           
|Series A Preferred Stock                              |  |                           
|                                                      |  |                           
|Dilutive potential common shares                      |  |                           
|                                                      |  |                           
|Denominator for diluted earnings (loss) per share     |  |                           
|                                                      |  |                           
|                                                     
|Net income (loss) per share  basic and diluted:      |  |                           
|                                                     
|Net income (loss) per share  basic                   |  | $                         
|                                                      |  |                           
|                                                     
|Net income (loss) per share  diluted                 |  | $                         
|                                                      |  |                           



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|                                                      |  | For the Six Months Ended
|----------------------------------------------------- |  | ------------------------
|                                                      |  | March 30, 2003          
|Numerator:                                            |  |                         
|Net income (loss) attributable to common shareholders |  | $                       
|                                                      |  |                         
|                                                     
|Denominator:                                          |  |                         
|Denominator for basic earnings                        |  |                         
|Per share  weighted average shares                   |  |                         
|                                                      |  |                         
|                                                     
|Effect of dilutive securities:                        |  |                         
|Warrants                                              |  |                         
|Dilution protection shares                            |  |                         
|Series A Preferred Stock                              |  |                         
|                                                      |  |                         
|Dilutive potential common shares                      |  |                         
|                                                      |  |                         
|                                                     
|Denominator for diluted earnings (loss) per share     |  |                         
|                                                      |  |                         
|                                                     
|Net income (loss) per sharebasic and diluted:        |  |                         
|                                                     
|Net income (loss) per share  basic                   |  | $                       
|                                                      |  |                         
|                                                     
|Net income (loss) per share  diluted                 |  | $                       
|                                                      |  |                         



For the
three and six month periods ended March 30, 2003, stock options covering 472,000 shares, warrants to purchase 2,685,355 shares, 252,632 dilution protection shares and preferred stock convertible into 283,076 shares were excluded from the calculation
of diluted per share amounts as their effect, if any, would be antidilutive.



Share and per share data for prior periods presented have been retroactively restated to reflect the 12,010-shares-for-1 stock split in October 2002.



|6. |  | INCOME TAXES
|-- |  | ------------



For the year ended September 29, 2002 and for the period through the effective date of the spin-off, the Company is included in the
consolidated federal tax return of its former Parent and has provided for federal taxes on a separate company basis in accordance with SFAS No. 109, Accounting for Income Taxes. Historically, with respect to state income taxes, primarily in
California, the Company has been able to reduce its tax liability by offsetting otherwise taxable income with other losses under the Parent entity. Following the completion of the spin-off in October 2002, the Companys tax returns will be
filed on a stand-alone basis.



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Due to
operating losses for the three and six month periods ended March 30, 2003, the Company has provided tax benefits and recorded a tax asset, classified among prepaid expenses and other current assets, of approximately $1.6 million. The Company has not
recorded a valuation allowance against any of its deferred tax assets, since it is believed that such assets are more likely than not to be recoverable through estimated future operations.



|7. |  | SPIN-OFF TRANSACTION AND RELATED EVENTS
|-- |  | ---------------------------------------



Spin-Off Transaction



On August 14, 2001, Overhill Corporations Board of Directors approved a plan to spin off Overhill Farms to the stockholders of the
Parent. On October 29, 2002, Overhill Corporation accomplished the spin-off by distributing, in the form of a tax-free dividend, 100% of its ownership of Overhill Farms common stock, representing 99% of the then issued and outstanding common
stock of Overhill Farms, to Overhill Corporation stockholders of record as of September 30, 2002. Overhill Corporation stockholders each received one share of Overhill Farms common stock for every two shares of Overhill Corporation common
stock they owned as of the date of record. Any Overhill Corporation stockholder entitled to a fractional share under this formula received cash, which was immaterial. Immediately after the spin-off transaction became effective, Overhill Corporation
no longer had any ownership interest in Overhill Farms.



Stock Split and Income Per Share



To facilitate the spin-off, the Companys Board of Directors, in October 2002, authorized a stock split of 12,010-shares-for-1, which increased the Companys outstanding shares of common stock to approximately 9.4 million
shares. Shares issuable pursuant to outstanding warrants and conversion rights of preferred stock were similarly increased. Share and per share data for all periods presented herein have been adjusted to reflect the 12,010-shares-for-1 stock split.



Stock Option Plan and Dilution Protection
Shares Issuance



In connection with the
spin-off, the Companys Board of Directors adopted a stock option plan for eligible employees. A total of 800,000 post-stock split shares of the Companys common stock were reserved for issuance under this plan. This reservation of shares
gave effect to the dilution protection for LLCP and resulted in an increase in the number of common shares issuable to LLCP with respect to the dilution protection rights related to LLCPs stock ownership and to its warrant exercise and
preferred stock conversion positions. Accordingly, in November 2002, an additional 252,632 shares of common stock were issued to LLCP, for no additional consideration, representing all dilution protection shares then currently issuable pursuant to
the agreements with LLCP.



In October 2002,
concurrently with the spin-off and pursuant to the Companys 2002 Employee Stock Option Plan, the Companys Board of Directors granted to certain officers and directors nonqualified options to purchase 472,000 shares, at an exercise price
of $1.60 per share, the fair market value per share as of the date of grant. These options became exercisable on January 1, 2003 and generally have a ten-year life.



The Company accounts for stock-based compensation utilizing the intrinsic value method in accordance with the
provisions of Accounting Principles Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees and related interpretations, and complies with the disclosure provisions of Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation (SFAS No. 123) and SFAS No. 148, Accounting for Stock-Based CompensationTransition and Disclosure. Accordingly, no compensation expense is recognized for fixed option plans
because the exercise prices of employee stock options equal or exceed the market prices of the underlying stock on the dates of grant. For purposes of pro forma disclosure, the estimated fair value of stock-based compensation plans and other options
is amortized to expense primarily over the vesting period.



The following table represents the effect on net income and earnings per share if the Company had applied the fair value based method and recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123,
Accounting for Stock-Based Compensation, to stock-based Employee compensation (in thousands, except per share amounts) for the three and six months ended March 30, 2003 and March 31, 2002:



|                                                                                                                                             |  | 3 Months Ended |        |   | 6 Months Ended
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------ | - | --------------
|                                                                                                                                             |  | March 30, 2003 |        |   | March 31, 2002
|Net income (loss), as reported                                                                                                               |  | $              | (1,807 | ) |               
|                                                                                                                                            
|Deduct: Total stock-based employee Compensation expense determined under fair value
based methods for all awards, net of related tax effects |  | $              |       |   |               
|                                                                                                                                            
|Pro forma net income (loss)                                                                                                                  |  | $              | (1,807 | ) |               
|                                                                                                                                            
|Net income (loss) per share                                                                                                                  |  |                |        |   |               
|Basic, as reported                                                                                                                           |  | $              | (0.15  | ) |               
|Basic, pro forma                                                                                                                             |  | $              | (0.15  | ) |               
|                                                                                                                                            
|Diluted, as reported                                                                                                                         |  | $              | (0.15  | ) |               
|Diluted, pro forma                                                                                                                           |  | $              | (0.15  | ) |               



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Warrant
Exercise



In December 2002, LLCP exercised
warrants to purchase 2,685,355 shares of the Companys common stock for a nominal exercise price.



Receivable from Parent and Notes Receivable from Officers



From time to time, Overhill Farms made noninterest-bearing advances to or on behalf of its Parent for various
purposes. Additionally, the Company has also offset other amounts, primarily net income tax liabilities payable by the Company to its Parent, as partial payments against the intercompany receivable from Parent balance. The net intercompany amount
due from Parent, which included certain advances agreed to be made subsequent to the spin-off, totaled approximately $11.5 million as of the effective date of the spin-off, and was charged to retained earnings as of that time.



In October 2002, in connection with the spin-off, the
Companys Parent transferred to the Company certain notes receivable with a principal balance of approximately $400,000. These notes receivable are due from certain officers of both the Parent and the Company who, subsequent to the spin-off,
remained officers of the Company and are no longer employed by the Parent. These notes receivable are collateralized solely by the common stock of the Parent. Based upon the Companys assessment of the collectibility of these notes receivable,
including the value of the subject collateral, the Company assigned no value to these notes receivable upon their receipt effective as of October 29, 2002, the date of the spin-off, and the notes receivable continue to have no recorded value as of
March 30, 2003. Any amounts ultimately realized, if any, on these notes receivable, will be recorded as an adjustment to shareholders equity at the time such amounts are realized.



|8. |  | CONTINGENCIES
|-- |  | -------------



Legal Proceedings



From time to time, the Company is involved in various lawsuits, claims and proceedings related to the conduct of its business. Management
does not believe that the disposition of any pending claims is likely to have a material adverse effect on the Companys financial condition, results of operations or cash flows.



Concentrations of Credit Risk



The Companys financial instruments that are exposed to concentrations of credit risk consist primarily
of trade receivables. The Company performs ongoing credit evaluations of its customers financial condition and generally requires no collateral from its customers.



For the six months ended ended March 30, 2003 and March 31, 2002, revenues from airline-related customers
accounted for approximately 20.9% and 22.2% of total net revenues, respectively. Additionally, accounts receivable from airline-related customers accounted for approximately 30.7% and 26.0% of the total accounts receivable balance at March 30, 2003
and March 31, 2002, respectively.



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For the six
months ended March 30, 2003 and March 31, 2002, the Companys largest airline customer, American Airlines, accounted for approximately 6.5% and 8.3% of total net revenues, respectively. Additionally, accounts receivable from American accounted
for approximately 11.5% and 8.7% of the total accounts receivable balance at March 30, 2003 and March 31, 2002, respectively. The results of the tragic events of September 11, 2001 have significantly impacted the Companys sales to airlines.
The long-term effect of these events on the airline industry, airline revenues, and on Overhill Farms business in particular, still cannot be accurately determined at this time. These events have resulted in a decreased demand for air travel
and a reduction in the number of meals served as a result of airlines cost savings measures. These effects, depending upon their scope and duration, which cannot be predicted at this time, could negatively impact the Companys financial
position, results of operations or cash flows.



In December 2002, United Airlines filed a petition for bankruptcy reorganization. As of the date of Uniteds bankruptcy filing, the Companys outstanding receivable balance from United was approximately $180,000. The
Company will continue to pursue collection of pre-bankruptcy receivables from United through the normal course of bankruptcy proceedings. However, as of March 30, 2003, the Company has fully reserved all of its pre-bankruptcy receivables from United
due to uncertainty with respect to their ultimate collectibility. The Company no longer does business with United.



The Company continues to do business with American Airlines. The Company will evaluate its business relationship with American Airlines on
an ongoing basis to determine the manner in which the relationship should be continued.



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Item 2.
MANAGEMENTS DISCUSSION AND ANALYSIS



Statements contained in this Form 10-Q that are not historical facts, including, but not limited to, any projections contained herein, are forward-looking statements and involve a number of risks and uncertainties. The
actual results of the future events described in such forward- looking statements in this Form 10-Q could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially
are: adverse economic conditions, industry competition and other competitive factors, government regulation and possible future litigation.



Results of Operations



Three Months Ended March 30, 2003 Compared to Three Months Ended March 31, 2002



Net Revenues.Revenues for the three months ended
March 30, 2003 decreased $675,000 (2%) to $33,428,000 from $34,103,000 for the three months ended March 31, 2002. This revenue decrease consisted of decreases in sales to existing customers in retail and other of $1,094,000 (13.3%) and in airlines
of $715,000 (9.0%) and was partially offset by increases in sales to existing customers in foodservice of $813,000 (6.5%) and in health care of $321,000 (5.8%).



Gross Profit.Gross profit for the quarter ended March 30, 2003 decreased $1,450,000 to $3,735,000
from $5,185,000 in the comparable period in the prior year. Gross profit as a percentage of net revenues decreased to 11.1% in the quarter ended March 30, 2003 from 15.2% for the comparable period in 2002. The gross profit decrease related largely
to manufacturing-related inefficiencies encountered in connection with the plant consolidation during the quarter.



Selling, General and Administrative Expenses.Selling, general and administrative expenses increased $1,446,000 for the quarter
ended March 30, 2003 to $4,908,000 (14.7% of revenues) from $3,462,000 (10.2% of revenues) for the second quarter of fiscal 2002. Significant portions of this increase in SG&A were delivery and storage costs of $339,000 which were largely
related to the consolidation of facilities and increased fuel costs, product demonstration costs of $179,000 for the Companys Chicago Brothers brand products in the retail segment, professional fees of $451,000 consisting of increased
accounting and audit fees and other consultants retained to assist the Company in streamlining and reducing its cost structure, bad debt expense of $106,000 due to the bankruptcies of two minor customers and compensation and related costs of
$174,000.



The Company has now completed the
consolidation of certain home office, manufacturing, warehousing, product development, marketing and quality control functions into a single 170,000 square foot operating facility located in Vernon, California. The Company will now maintain only two
locations, the new site, and an existing 75,000 square foot cooking facility also located in Vernon, California. Management believes that the Company should expect, as a result of this consolidation, to achieve significant operating efficiencies as
well as a reduction of its dependence on outside cold storage facilities. The savings from the



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consolidation are expected to result from reduced cold storage and refrigerant costs, a
lower overall facility lease expense, together with manpower and efficiency savings.



Other Expenses.Other expenses for the quarter ended March 30, 2003, consisting primarily of interest expense, increased to $1,845,000, as compared to $1,356,000 for the comparable
period in 2002, an increase of $489,000, which is largely due to increases in amortization of deferred financing costs.



Net Income (Loss).The net result for the quarter ended March 30, 2003 was a loss of $1,807,000 ($.15 per share) as compared to net
income of $220,000 ($.02 per share) for the comparable period in the prior year



Six Months Ended March 30, 2003 Compared to Six Months Ended March 31, 2002



Net Revenues.For the six months ended March 30, 2003, revenues increased $4,098,000 (6.1%) to $71,559,000 as compared to
$67,461,000 for the six months ended March 31, 2002. This revenue increase is primarily due to increased sales to existing customers in the foodservice and health care segments, with current year revenues of $29,196,000 and $11,036,000,
respectively, each increasing from the prior year by 11%. Current year revenues from airlines of $15,035,000 and retail and other of $16,292,000 remained substantially unchanged from the comparable period in the prior year



Gross Profit.Gross profit for the six months ended
March 30, 2003 decreased $1,361,000 to $9,009,000 from $10,370,000 for the comparable period in 2002. Gross profit as a percentage of net revenues decreased to 12.6% in 2003 as compared to 15.4% for the same period in 2002. The gross profit decrease
related largely to manufacturing-related inefficiencies encountered in connection with the plant consolidation during the first six months of fiscal 2003.



Selling, General and Administrative Expenses.Selling, general and administrative expenses for the six months ended March 30, 2003
increased $2,750,000 to $9,755,000 (13.6% of revenues) from $7,005,000 (10.4% of revenues) for the comparable period in 2002. Factors significantly contributing to the increase in SG&A expenses were increases in delivery and storage costs of
$1,109,000 largely due to increased sales, increased fuel costs and to the consolidation of facilities, new product demonstration costs of $306,000 for the Companys Chicago Brothers brand products in the retail segment, professional fees of
$452,000 consisting of increased accounting and audit fees and other consultants retained to assist the Company in streamlining and reducing its cost structure, bad debt expense of $279,000 due to the bankruptcy of United Airlines and to the
bankruptcies of two minor customers and compensation and related costs of $282,000.



The Company has now completed the consolidation of certain home office, manufacturing, warehousing, product development, marketing and quality control functions into a single 170,000 square foot
operating facility located in Vernon, California. The Company will now maintain only two locations, the new site, and an existing 75,000 square foot cooking facility also located in Vernon, California. Management believes that the Company should
expect, as a result of this consolidation, to achieve significant operating efficiencies as well as a reduction of its dependence on outside cold storage facilities. The savings from the



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consolidation are expected to result from reduced cold storage and refrigerant costs, a
lower overall facility lease expense, together with manpower and efficiency savings.



Other Expenses.Other expenses during the six months ended March 30, 2003, consisting primarily of interest expense, increased to $3,352,000, as compared to $2,700,000 for the six months ended
March 31, 2002, an increase of $652,000. This increase is largely due to an increase in amortization of deferred financing costs.



Net Income (Loss).The net result for the six months ended March 30, 2003 was a loss of $2,453,000 ($.22 per share) as compared to
net income of $398,000 ($.03 per share) for the comparable period in the prior year.



Liquidity and Capital Resources



Principal sources of liquidity are cash flows from operations and existing financing arrangements. The Companys cash and cash equivalents, which are maintained on a minimum basis, increased to
$11,000 as of the period ended March 30, 2003.



During the six months ended March 30, 2003, the Companys operating activities resulted in cash provided of approximately $6,925,000, as compared to cash provided of $54,000 during the comparable period in the prior year. During
the current period, operating losses were more than offset by cash favorable changes in accounts receivable, inventories, accounts payable and accrued liabilities. As of March 30, 2003, the Company had a working capital deficit of approximately
$3.8 million.



During the six months ended
March 30, 2003, the Companys investing activities resulted in a use of cash of approximately $4,734,000, as compared to $1,005,000 during the same period in the previous year. The use of cash in the current year consisted exclusively of
additions to property and equipment, primarily related to the consolidation of most of the Companys operations into a new facility in Vernon, California.



During the six months ended March 30, 2003, the Companys financing activities resulted in a use of cash of approximately $2,189,000,
as compared to cash provided of $931,000 during the comparable period in fiscal 2002. The use of cash in the current period resulted primarily from principal payments on long-term debt, deferred financing costs and advances to or on behalf of Parent
in connection with the spin-off, which was reduced by net borrowings on the Companys line of credit.



The Companys financial instruments that are exposed to concentrations of credit risk consist primarily of trade receivables. The
Company performs ongoing credit evaluations of its customers financial condition and generally requires no collateral from its customers.



For the six months ended ended March 30, 2003 and March 31, 2002, revenues from airline-related customers accounted for approximately
20.9% and 22.2% of total net revenues, respectively. Additionally, accounts receivable from airline-related customers accounted for approximately 30.7% and 26.0% of the total accounts receivable balance at March 30, 2003 and March 31, 2002,
respectively.



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For the six
months ended March 30, 2003 and March 31, 2002, the companys largest airline customer, American Airlines, accounted for approximately 6.5% and 8.3% of total net revenues, respectively. Additionally, accounts receivable from American accounted
for approximately 11.5% and 8.7% of the total accounts receivable balance at March 30, 2003 and March 31, 2002, respectively. The results of the tragic events of September 11, 2001 have significantly impacted the Companys sales to airlines.
The long-term effect of these events on the airline industry, airline revenues, and on Overhill Farms business in particular, still cannot be accurately determined at this time. These events have resulted in a decreased demand for air travel
and a reduction in the number of meals served as a result of airlines cost savings measures. These effects, depending upon their scope and duration, which cannot be predicted at this time, could negatively impact the Companys financial
position, results of operations or cash flows.



In December 2002, United Airlines filed a petition for bankruptcy reorganization. As of the date of Uniteds bankruptcy filing, the Companys outstanding receivable balance from United was approximately $180,000. The
Company will continue to pursue collection of pre-bankruptcy receivables from United through the normal course of bankruptcy proceedings. However, as of March 30, 2003, the Company has fully reserved all of its pre-bankruptcy receivables from United
due to uncertainty with respect to their ultimate collectibility. The Company no longer does business with United.



The Company continues to do business with American Airlines. The Company will evaluate its business relationship with American Airlines on
an ongoing basis to determine the manner in which the relationship should be continued.



The Companys material contractual obligations and commercial commitments consist primarily of long-term debt arrangements and commitments under operating leases. As of March 30, 2003, there have
been no significant changes in the Companys commitments related to future minimum lease payments, and significant changes in the Companys long-term debt arrangements are discussed further below.



The Companys long-term debt arrangements at March 30,
2003 primarily consisted of a $20.0 million revolving line of credit with its senior creditor, Union Bank of California, N.A. (the Bank), a term loan payable in an original principal amount of $2.4 million to the Bank, and a term loan
payable in an original principal amount of $28.0 million to its senior subordinated creditor, Levine Leichtman Capital Partners, L.P. (LLCP).



At March 30, 2003, amounts outstanding under these arrangements payable to Union Bank were $12.6 million on the revolving line of credit
and $850,000 on term loans, and the amount payable to LLCP was $24.7 million on a term loan.



The Companys revolving line of credit, senior subordinated note payable and term loan agreements all contain various financial covenants including restrictions on changes in control, capital
expenditures, minimum EBITDA and net worth levels, specified debt service and debt-to-equity ratios, and prohibitions on certain loans, advances and dividend payments. As of March 30, 2003, the Company was not in compliance with certain financial
covenants with respect to its financing arrangements with both Union Bank and LLCP.



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Effective
April 4, 2003, the Company reached a bridge financing agreement with LLCP whereby, with the consent of Union Bank, LLCP purchased, for total consideration of $3.025 million, $3.0 million principal amount of term notes, bearing interest at 15%, which
are due and payable January 30, 2004, together with 2,466,759 shares of the Companys common stock. In connection with this transaction, a debt discount of approximately $1.65 million will be recorded and amortized over a 10-month period ending
in January 2004. Also in connection therewith, each of Union Bank and LLCP agreed to waive all events of noncompliance that were in existence as of the effective date of the bridge financing. The issuance of the shares of common stock is subject to
the approval of a listing application for the shares by the American Stock Exchange, of which there can be no assurance. The Companys securities purchase agreement with LLCP, as amended and restated in April 2003, provides that the Company
must issue the shares to LLCP by April 24, 2003. Subsequent to the completion of the transaction, the American Stock Exchange indicated that, under Amex rules, shareholder approval is required as a condition for Amex approval of the Companys
additional listing application for the issuance of the shares to LLCP. Accordingly, the Company has agreed to call a special meeting of its shareholders to authorize the transaction. LLCP and the Company have agreed that, in light of the Amex rules,
and in consideration of the payment by the Company to LLCP of an amendment fee of $125,000, the agreement be amended to allow the Company until June 30, 2003, and upon proper notification to LLCP by the Company, until July 20, 2003, to secure
shareholder approval. Although there can be no assurance that the Company will receive the necessary approvals, the Company believes that the necessary approvals can be obtained during that period.



Effective April 16, 2003, Pleasant Street Investors, LLC, an
affiliate of LLCP, acquired the senior secured loans previously made by Union Bank, and the Company and Pleasant Street Investors amended and restated the senior secured loan arrangements on mutually acceptable terms and conditions. As a result of
the repayment of Union Bank, the Company will be writing off deferred financing costs of approximately $500,000 related to the arrangements with the Bank. Under the new agreement, amounts owing to Union Bank on the effective date, $12.117 million,
plus additional amounts advanced to the Company by Pleasant Street Investors, $1.883 million, together with the amounts owing to LLCP under the bridge financing agreement described above, $3.0 million, were combined into a new $17.0 million Term
Loan A, bearing interest at no less than 10%, subject to periodic adjustments, and due and payable on November 30, 2003. Additional amounts advanced by Pleasant Street Investors to the Company as of the effective date amounted to $5.0 million and
were evidenced by Term Loan B, bearing interest at 15%, and is due and payable January 30, 2004. The Company used $3.0 million of proceeds from Term Loan A to repay the outstanding principal amounts of the term note issued to LLCP on April 4, 2003.



Immediately prior to the completion of the
spin-off, the Company received formal consents to the spin-off from the Bank and LLCP. At that time, the Company entered into amendments and restatements, as appropriate, to its financing agreements and other arrangements with them. These consents,
amendments and restatements were necessary to comply with certain provisions in the existing financing agreements with each of these creditors that were affected by the spin-off and related transactions.



The Companys senior subordinated creditor, LLCP, is the
holder of a secured senior subordinated note, which it purchased from the Company in November 1999 pursuant to a securities purchase agreement. The Company and LLCP amended and restated the securities purchase agreement, the note and amended various
related agreements in connection with the spin-off and again in connection with the April 2003 refinancing transactions. The note bears interest at a base rate per annum of 15%, with interest payable monthly. The note matures on October 31, 2004.
The Company is required to make mandatory principal payments each January for the previous fiscal year in an amount equal to 50% of the excess cash flow, as defined. The Company may make voluntary principal prepayments at any time, subject to
prepayment premiums. The securities purchase agreement contains various covenants, including financial covenants covering restrictions on capital expenditures, minimum EBITDA and net worth levels, and specified debt service and debt to equity
ratios. In addition, the terms of the securities purchase agreement prohibit changes in control, including



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ownership and management personnel, and contain customary restrictions on incurring
indebtedness and liens, making investments, paying dividends and making loans or advances. The note and all other obligations owing to the senior subordinated creditor are secured by subordinated liens on substantially all of the Companys
assets and by a guaranty of Overhill L.C. Ventures, Inc., the Companys wholly owned subsidiary.



Due to the fact that a substantial portion of the Companys financing matures within the next twelve months (Term Loan A in the
amount of $17.0 million is due November 30, 2003, and Term Loan B in the amount of $5.0 million is due January 31, 2004, as described above), the Company is actively seeking new financing arrangements both from LLCP, the Companys current
lender, as well as other potential sources of financing. No assurances can be made that such financing arrangements would be obtained by the Company on substantially the same terms and conditions, or at all.



As of April 4, 2003, the Company was in compliance with all of
its amended financial covenants. The Company believes, based upon historical performance, current results of operations for the six months ended March 30, 2003 and forecasted performance for the remainder of fiscal 2003, that it is probable that the
Company will be in compliance with all of its revised financial and other covenant requirements. Accordingly, the Companys senior subordinated debt, which matures in November 2004, has been classified as a long-term obligation in the
accompanying consolidated balance sheet as of March 30, 2003. In the future, the failure of the Company to achieve certain revenue, expense and profitability forecasts could result in a violation of the amended financial covenants under its
financing arrangements, which could have a material adverse effect on the Companys financial condition, results of operations or cash flows.



Item 3.
Quantitative and Qualitative Disclosures about Market Risk



The Company does not own, nor does it have an interest in any market risk sensitive instruments.



Item 4.
Controls and Procedures



The Companys management, including its Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-14(c) and
15d-14(c) under the Securities Exchange Act of 1934) as of a date (the Evaluation Date) which was within 90 days of this quarterly report on Form 10-Q, has concluded in its judgment that, as of the Evaluation Date, the Companys
disclosure controls and procedures were adequate and designed to ensure that material information relating to the Company and its subsidiary would be made known to them. There were no significant changes in the Companys internal controls or,
to the Company managements knowledge, in other factors that could significantly affect the Companys disclosure controls subsequent to the Evaluation Date.



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PART II
 OTHER INFORMATION



Item 1.
Legal Proceedings



From time to time, the Company is involved in various lawsuits, claims and proceedings related to the conduct of its business. Management does not believe that the disposition of any pending claims is likely to have a material
adverse affect on the Companys financial condition, results of operations or cash flows.



Item 3.
Defaults Upon Senior Securities



As of March 30, 2003, the Company was not in compliance with certain financial covenants under borrowing arrangements with its two senior lenders. In connection with a bridge financing agreement entered into in April, 2003, each of
Union Bank and LLCP agreed to waive all events of noncompliance that were in existence as of the date of the bridge financing.



Item 6.
Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits
| | --- |  | --------



|Exhibit No. |  | Description of Exhibit                                                                                                                                                                                                
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|           
|10.1        |  | Second Amended and Restated Loan and Security Agreement, dated as of April 16, 2003, among Overhill Farms, Inc.,
Overhill L.C. Ventures, Inc. and Pleasant Street Investors, LLC                                      
|           
|10.2        |  | Amended and Restated Secured Senior Term A Note, dated as of April 16, 2003 in the stated principal amount of
$17,000,000, made by Overhill Farms, Inc. and payable to the order of Pleasant Street Investors, LLC    
|           
|10.3        |  | Secured Senior Term B Note, dated as of April 16, 2003 in the stated principal amount of $5,000,000, made by Company
and payable to the order of Pleasant Street Investors, LLC                                       
|           
|10.4        |  | Second Amended and Restated Securities Purchase Agreement, dated as of April 16, 2003, by and among Overhill Farms,
Inc., the entities identified therein as Guarantors and Levine Leichtman Capital Partners II, L.P.
|           
|10.5        |  | Agreement Regarding Repayment of Bridge Note, dated as of April 16, 2003, by and among Overhill Farms, Inc., Overhill
Ventures, Levine Leichtman Capital Partners II, L.P. and Pleasant Street Investors, LLC         
|           
|10.6        |  | Amendment to Investor Rights Agreement, dated as of April 16, 2003, by and among Overhill Farms, Inc., James Rudis,
William E. Shatley and Levine Leichtman Capital Partners II, L.P.                                 
|           
|10.7        |  | Second Amendment to Amended and Restated Security Agreement, dated as of April 16, 2003, by Overhill Farms, Inc. and
Overhill L.C. Ventures, Inc. in favor of Levine Leichtman Capital Partners II, L.P.              
|           
|10.8        |  | Amendment to Equity Repurchase Option Agreement, dated as of April 16, 2003, by and between Overhill Farms, Inc. and
Levine Leichtman Capital Partners II, L.P.                                                       
|           
|99.1        |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002                                                                                                                                               
|           
|99.2        |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002                                                                                                                                               



(b)
Reports on Form 8-K  No reports on Form 8-K were filed during the quarter ended March 30, 2003.



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SIGNATURES



In accordance with the
requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                  
|------------------
|                  
|                  
|Date: May 19, 2003
|                  
|                  
|Date: May 19, 2003
|                  



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CERTIFICATIONS



I, James Rudis,
certify that:



1. I have reviewed this quarterly
report on Form 10-Q of Overhill Farms, Inc.;



2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly report;



3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly report;



4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:



a)
designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this
quarterly report is being prepared;



b) evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and



c) presented in this quarterly report our
conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;



5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors:



a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses in internal controls; and



b) any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal controls; and



6. The
registrants other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



Date: May 19, 2003



/s/ James RudisJames Rudis President and Chief Executive Officer




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##### Table of Contents



CERTIFICATIONS



I, John L. Steinbrun,
certify that:



1. I have reviewed this quarterly
report on Form 10-Q of Overhill Farms, Inc.;



2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly report;



3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly report;



4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:



a)
designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this quarterly report is being prepared;



b) evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and



c) presented in this quarterly report our
conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;



5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors:



a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses in internal controls; and



b) any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal controls; and



6. The
registrants other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



Date: May 19, 2003



/s/    John L. SteinbrunJohn L. Steinbrun Senior Vice President and Chief Financial Officer




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##### Table of Contents

EXHIBIT INDEX



|Exhibit No. |  | Description of Exhibit                                                                                                                                                                                                
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|           
|10.1        |  | Second Amended and Restated Loan and Security Agreement, dated as of April 16, 2003, among Overhill Farms, Inc.,
Overhill L.C. Ventures, Inc. and Pleasant Street Investors, LLC                                      
|           
|10.2        |  | Amended and Restated Secured Senior Term A Note, dated as of April 16, 2003 in the stated principal amount of
$17,000,000, made by Overhill Farms, Inc. and payable to the order of Pleasant Street Investors, LLC    
|           
|10.3        |  | Secured Senior Term B Note, dated as of April 16, 2003 in the stated principal amount of $5,000,000, made by Company
and payable to the order of Pleasant Street Investors, LLC                                       
|           
|10.4        |  | Second Amended and Restated Securities Purchase Agreement, dated as of April 16, 2003, by and among Overhill Farms,
Inc., the entities identified therein as Guarantors and Levine Leichtman Capital Partners II, L.P.
|           
|10.5        |  | Agreement Regarding Repayment of Bridge Note, dated as of April 16, 2003, by and among Overhill Farms, Inc., Overhill
Ventures, Levine Leichtman Capital Partners II, L.P. and Pleasant Street Investors, LLC         
|           
|10.6        |  | Amendment to Investor Rights Agreement, dated as of April 16, 2003, by and among Overhill Farms, Inc., James Rudis,
William E. Shatley and Levine Leichtman Capital Partners II, L.P.                                 
|           
|10.7        |  | Second Amendment to Amended and Restated Security Agreement, dated as of April 16, 2003, by Overhill Farms, Inc. and
Overhill L.C. Ventures, Inc. in favor of Levine Leichtman Capital Partners II, L.P.              
|           
|10.8        |  | Amendment to Equity Repurchase Option Agreement, dated as of April 16, 2003, by and between Overhill Farms, Inc. and
Levine Leichtman Capital Partners II, L.P.                                                       
|           
|99.1        |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                               
|           
|99.2        |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                               



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