##### 



Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 (Mark One)þ
    
    QUARTERLY REPORT PURSUANT TO
SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended April 2, 2005
 OR o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from
 to
 Commission File Number 1-32439 CUISINE SOLUTIONS, INC.  DELAWARE
    
    52-0948383(State or other jurisdiction of
incorporation or organization)
    
    (IRS Employer Identification Number)
 85 S Bragg Street, Suite 600, Alexandria, VA 22312
(Address of principal executive offices) (Zip Code) (Registrants telephone number, including area code) (703) 270-2900 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 þ No o
 Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act). Yes o No þ
 Indicate the number of shares outstanding of each of the issuers classes of common stock as of May
16, 2005. Common Stock 0.01 par value
    
    Number of SharesClass A
    
    15,965,538Class B
    
    None
   1




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##### 



CUISINE SOLUTIONS, INC. PART I: FINANCIAL INFORMATION Item 1. Financial Statements The accompanying unaudited consolidated financial statements have been prepared by the Company
pursuant to the rules and regulations of the United States Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete financial statements.
In the opinion of the Company, all adjustments necessary for the fair presentation of the Companys
results of operations, financial position and changes therein for the periods presented have been
included. 2




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##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited) April 2,
    
    
    June 26,2005
    
    
    2004ASSETSCurrent AssetsCash and cash equivalents
    
    $
    903,000
    
    
    $
    1,395,000Trade accounts receivable, net of reserve of $415,000 and
$68,000 as of April 2, 2005 and June 26, 2004, respectively
    
    
    3,779,000
    
    
    
    3,754,000Inventory, net
    
    
    8,144,000
    
    
    
    5,420,000Prepaid expenses
    
    
    395,000
    
    
    
    140,000Notes receivable, related party
    
    
    86,000
    
    
    
    58,000Other current assets
    
    
    358,000
    
    
    
    266,000Assets held for disposal from discontinued operations
    
    
    469,000
    
    
    
    1,972,000TOTAL CURRENT ASSETS
    
    
    14,134,000
    
    
    
    13,005,000Investments
    
    
    1,468,000
    
    
    
    1,114,000Property and Equipment, net
    
    
    3,805,000
    
    
    
    3,545,000Other assets
    
    
    68,000
    
    
    
    46,000TOTAL ASSETS
    
    $
    19,475,000
    
    
    $
    17,710,000LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesLine-of-Credit
    
    $
    2,074,000
    
    
    $
    Current portion of long-term debt
    
    
    481,000
    
    
    
    921,000Accounts payable and accrued expenses
    
    
    4,505,000
    
    
    
    4,260,000Accrued payroll and related liabilities
    
    
    1,427,000
    
    
    
    1,340,000Liabilities from discontinued operations
    
    
    1,730,000
    
    
    
    3,635,000Total current liabilities
    
    
    10,217,000
    
    
    
    10,156,000Long-term debt, less current portion
    
    
    1,081,000
    
    
    
    982,000TOTAL LIABILITIES
    
    
    11,298,000
    
    
    
    11,138,000Stockholders equityCommon stock  $.01 par value, 20,000,000 shares authorized,
15,960,538 and 15,834,788 shares issued and outstanding
at April 2, 2005 and June 26, 2004, respectively
    
    
    160,000
    
    
    
    159,000Class B Stock  $.01 par value, 175,000 shares authorized,
none issued
    
    
    
    
    
    
    Additional paid-in capital
    
    
    26,627,000
    
    
    
    26,380,000Accumulated deficit
    
    
    (19,224,000
    )
    
    
    (20,490,000
    )Accumulated Other Comprehensive IncomeUnrealized gain on debt and equity investments
    
    
    (3,000
    )
    
    
    17,000Cumulative translation adjustment
    
    
    617,000
    
    
    
    506,000TOTAL STOCKHOLDERS EQUITY
    
    
    8,177,000
    
    
    
    6,572,000TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    19,475,000
    
    
    $
    17,710,000
 See accompanying notes to consolidated financial statements. 3




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##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) Third Quarter
    
    
    Year to DateSixteen Weeks Ended
    
    
    Forty Weeks EndedApr 02, 2005
    
    
    Apr 03, 2004
    
    
    Apr 02, 2005
    
    
    Apr 03, 2004NET SALES
    
    $
    14,355,000
    
    
    $
    10,913,000
    
    
    $
    34,120,000
    
    
    $
    26,411,000Cost of goods sold
    
    
    10,553,000
    
    
    
    8,539,000
    
    
    
    25,292,000
    
    
    
    20,581,000Gross Margin
    
    
    3,802,000
    
    
    
    2,374,000
    
    
    
    8,828,000
    
    
    
    5,830,000Selling and administration
    
    
    3,077,000
    
    
    
    2,498,000
    
    
    
    7,020,000
    
    
    
    5,598,000Depreciation and amortization
    
    
    158,000
    
    
    
    123,000
    
    
    
    370,000
    
    
    
    348,000Earnings from operations
    
    
    567,000
    
    
    
    (247,000
    )
    
    
    1,438,000
    
    
    
    (116,000
    )Nonoperating income (expense) from continuing operationsInvestment income
    
    
    19,000
    
    
    
    19,000
    
    
    
    47,000
    
    
    
    50,000Interest expense
    
    
    (49,000
    )
    
    
    3,000
    
    
    
    (118,000
    )
    
    
    (14,000
    )Other income (expense)
    
    
    (26,000
    )
    
    
    (21,000
    )
    
    
    (44,000
    )
    
    
    (73,000
    )Total non-operating expense from continuing operations
    
    
    (56,000
    )
    
    
    1,000
    
    
    
    (115,000
    )
    
    
    (37,000
    )Earnings (Loss) from continuing operations before income taxes
    
    
    511,000
    
    
    
    (246,000
    )
    
    
    1,323,000
    
    
    
    (153,000
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Earnings (Loss) from continuing operations before
discontinued operations
    
    
    511,000
    
    
    
    (246,000
    )
    
    
    1,323,000
    
    
    
    (153,000
    )Loss from discontinued operationsLoss from operations of CS Norway
    
    
    
    
    
    
    (316,000
    )
    
    
    (57,000
    )
    
    
    (527,000
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss from discontinued operations
    
    
    
    
    
    
    (316,000
    )
    
    
    (57,000
    )
    
    
    (527,000
    )NET EARNINGS (LOSS)
    
    $
    511,000
    
    
    $
    (562,000
    )
    
    $
    1,266,000
    
    
    $
    (680,000
    )Basic and diluted earnings (loss) per share:Earnings (loss) from continuing operations
per common share-basic and diluted
    
    $
    0.03
    
    
    ($
    0.02
    )
    
    $
    0.08
    
    
    ($
    0.01
    )Loss from discontinued operations
per common share-basic and diluted
    
    
    
    
    
    ($
    0.02
    )
    
    
    
    
    
    ($
    0.03
    )Net earnings (loss) per common share-basic
    
    $
    0.03
    
    
    ($
    0.04
    )
    
    $
    0.08
    
    
    ($
    0.04
    )Net earnings (loss) per common share-diluted
    
    $
    0.03
    
    
    ($
    0.04
    )
    
    $
    0.08
    
    
    ($
    0.04
    )Weighted average shares outstanding-basic
    
    
    15,947,547
    
    
    
    15,826,931
    
    
    
    15,909,930
    
    
    
    15,825,645Common stock equivalents
    
    
    1,772,690
    
    
    
    
    
    
    
    1,506,989
    
    
    
    Weighted average shares outstanding-diluted
    
    
    17,720,237
    
    
    
    15,826,931
    
    
    
    17,416,919
    
    
    
    15,825,645-
 See accompanying notes to consolidated financial statements. 4




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##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Year to dateForty weeks endedApril 2,
    
    
    April 3,2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESNet Income (Loss ) from continuing operations
    
    $
    1,323,000
    
    
    $
    (153,000
    )Net Loss from discontinued operations
    
    
    (57,000
    )
    
    
    (527,000
    )Adjustments to reconcile net loss to
net cash used in operating activitiesDepreciation and amortization
    
    
    587,000
    
    
    
    545,000Allowance for doubtful accounts
    
    
    347,000
    
    
    
    475,000Inventory obsolescence reserve
    
    
    55,000
    
    
    
    (251,000
    )Stock based compensation
    
    
    131,000
    
    
    
    49,000Changes in assets and liabilities:Increase in accounts receivable trade
    
    
    (372,000
    )
    
    
    (1,228,000
    )Increase in inventory
    
    
    (2,779,000
    )
    
    
    (389,000
    )(Increase) decrease in prepaid expenses
    
    
    (255,000
    )
    
    
    119,000Increase in notes receivable, related party
    
    
    (28,000
    )
    
    
    (44,000
    )Increase in other assets
    
    
    (114,000
    )
    
    
    (190,000
    )Increase in accounts payable and accrued expenses
    
    
    176,000
    
    
    
    409,000Increase in accrued payroll and related liabilities
    
    
    87,000
    
    
    
    45,000Increase in other liabilities
    
    
    69,000
    
    
    
    22,000Changes in assets and liabilities of discontinued operations
    
    
    (206,000
    )
    
    
    276,000Gain on disposal of assets of discontinued operations
    
    
    (571,000
    )
    
    
    Net cash used in operating activities
    
    
    (1,607,000
    )
    
    
    (842,000
    )CASH FLOWS FROM INVESTING ACTIVITIESSale of investments
    
    
    
    
    
    
    175,000Capital expenditures
    
    
    (846,000
    )
    
    
    (354,000
    )Net cash used in investing activities
    
    
    (846,000
    )
    
    
    (179,000
    )CASH FLOWS FROM FINANCING ACTIVITIESNet borrowings on Line-of-credit
    
    
    2,074,000
    
    
    
    Borrowings on debt obligations
    
    
    200,000
    
    
    
    Payments on notes payable
    
    
    (541,000
    )
    
    
    838,000Proceeds from issuance of common stock
    
    
    117,000
    
    
    
    6,000Net cash provided in financing activities
    
    
    1,850,000
    
    
    
    844,000Net decrease in cash and cash equivalents
    
    
    (603,000
    )
    
    
    (177,000
    )Effect of exchange rate on cash
    
    
    111,000
    
    
    
    210,000Cash and cash equivalents, beginning of period
    
    
    1,395,000
    
    
    
    867,000CASH and CASH EQUIVALENTS, END OF PERIOD
    
    $
    903,000
    
    
    $
    900,000
 See accompanying notes to consolidated financial statements 5




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##### 



Cuisine Solutions, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
(Unaudited) Unrealized GainAdditional
    
    
    
    
    
    
    (Loss) on Debt
    
    
    Cumulative
    
    
    TotalCommon
    
    
    Paid-In
    
    
    Accumulated
    
    
    and Equity
    
    
    Translation
    
    
    StockholdersStock
    
    
    Capital
    
    
    Deficit
    
    
    Investments
    
    
    Adjustment
    
    
    EquityBalance, June 26, 2004
    
    $
    159,000
    
    
    $
    26,380,000
    
    
    $
    (20,490,000
    )
    
    $
    17,000
    
    
    $
    506,000
    
    
    $
    6,572,000Exercise of common stock options
    
    
    1,000
    
    
    
    116,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117,000Stock-based compensation
    
    
    
    
    
    
    131,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    131,000Ten periods 2005 net earnings
    
    
    
    
    
    
    
    
    
    
    1,266,000
    
    
    
    
    
    
    
    
    
    
    
    1,266,000Other Comprehensive Income/(loss)Unrealized loss on debt
and equity investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,000
    )
    
    
    
    
    
    
    (20,000
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111,000
    
    
    
    111,000Other Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    91,000Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,357,000Balance, April 2, 2005
    
    $
    160,000
    
    
    $
    26,627,000
    
    
    $
    (19,224,000
    )
    
    $
    (3,000
    )
    
    $
    617,000
    
    
    $
    8,177,000
 Unrealized GainAdditional
    
    
    
    
    
    
    (Loss) on Debt
    
    
    Cumulative
    
    
    TotalCommon
    
    
    Paid-In
    
    
    Accumulated
    
    
    and Equity
    
    
    Translation
    
    
    StockholdersStock
    
    
    Capital
    
    
    Deficit
    
    
    Investments
    
    
    Adjustment
    
    
    EquityBalance, June 28, 2003
    
    $
    159,000
    
    
    $
    26,284,000
    
    
    $
    (19,486,000
    )
    
    $
    59,000
    
    
    $
    450,000
    
    
    $
    7,466,000Exercise of common stock options
    
    
    
    
    
    
    7,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,000Stock-based compensation
    
    
    
    
    
    
    49,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,000Ten periods 2004 net loss
    
    
    
    
    
    
    
    
    
    
    (680,000
    )
    
    
    
    
    
    
    
    
    
    
    (680,000
    )Other comprehensive income/(loss)Unrealized loss on debt
and equity investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,000
    )
    
    
    
    
    
    
    (7,000
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    210,000
    
    
    
    210,000Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    203,000Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (477,000
    )Balance, April 3, 2004
    
    $
    159,000
    
    
    $
    26,340,000
    
    
    $
    (20,166,000
    )
    
    $
    52,000
    
    
    $
    660,000
    
    
    $
    7,045,000
 6




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##### 



Cuisine Solutions, Inc. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS  1)
    Financial Statements The accompanying unaudited consolidated financial statements have been prepared by the Company
pursuant to the rules and regulations of the United States Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete financial statements.
In the opinion of the Company, all adjustments necessary for the fair presentation of the Companys
results of operations, financial position and changes therein for the periods presented have been
included.  2)
    Fiscal Periods The Company utilizes a 52/53 week fiscal year which ends on the last Saturday in June. The first,
second and fourth quarters, of fiscal years 2005 and 2004 contain 12 weeks, and the third quarters
contains 16 weeks.  3)
    Inventory Inventories are valued at the lower of cost, determined by the first-in, first-out method, or
market. Included in inventory costs are raw materials, labor and manufacturing overhead. The
Company records the raw materials at delivered cost. Standard labor and manufacturing overhead
costs are applied to the finished goods based on normal production capacity as prescribed under ARB
No. 43, Chapter 4. The Company determines the inventory obsolescence reserve based on the Managements historical
experience and establishes reserves against inventory according to the age of the product.
Additional reserves are sometimes established as a result of lack of marketability or changes in
customer consumption patterns. Managements judgment is necessary in determining the realizable
value of those products to arrive at the proper obsolescence reserve. Total inventory obsolescence
reserves as of April 2, 2005 and June 26, 2004 were $217,000 and $162,000, respectively. Inventory consists of: April 2, 2005
    
    
    June 26, 2004Raw materials
    
    $
    2,328,000
    
    
    $
    1,586,000Frozen product & other finished goods
    
    
    4,892,000
    
    
    
    3,335,000Packing materials & supplies
    
    
    1,141,000
    
    
    
    661,0008,361,000
    
    
    
    5,582,000Less obsolescence reserve
    
    
    (217,000
    )
    
    
    (162,000
    )$
    8,144,000
    
    
    $
    5,420,000
  4)
    Commitments and Contingencies From time to time, the Company is engaged in ordinary and routine litigation incidental to its
business. Management does not anticipate that any amounts that it may be required to pay by reason
thereof will have a material effect on the Companys financial position or results of operations.  5)
    Transactions with Related Parties As of April 2, 2005, the Company had an accrued liability of $261,000 payable to Food Research
Corporation (FRC). The liability was previously payable to SOMDIAA and was assumed by FRC.
SOMDIAA is a holding company which is majority owned by Secria, S.A. and Secria Europe, S.A. Both
enterprises are owned by the Jean-Louis Vilgrain family (JLV Group); and FRC is owned by Secria 7




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##### 



Europe, S.A. SOMDIAA provides the administration of French Social Security healthcare and
retirement plans for individuals who work within the JLV Group. The primary portion of the accrual
is related to amounts billed from SOMDIAA for separate health and retirement plans for the
President of the Company and two other non-officer key employees. On June 12, 2001, the Company signed an agreement with Inversiones Stefal ltda of Chile, Farmers
Market Land of Germany, Inversiones Continex of Chile, and Iso-Tech Ltda of Brazil (the parties)
to create a joint venture that was originally contemplated to be structured as a partnership, to
build a sous-vide processing facility in Chile. This initial agreement was terminated without
prejudice between the parties in fiscal year 2003 prior to the capitalization of the partnership.
However, the parties decided to continue the project through the formation of a corporation,
Cuisine Solutions Chile, S.A. (Cuisine Solutions Chile). The Company received a 10% interest in
Cuisine Solutions Chile and is a minority shareholder of Cuisine Solutions Chile. The 10% interest
was issued to the Company in consideration of certain intangible assets, such as know-how for the
plant development and operations and marketing support, all of which had no carrying value on the
Companys balance sheet. Cuisine Solutions Chile is controlled by its majority shareholder and its
affiliates, none of which are affiliated with the Company. The intended purpose of the facility is
to produce high quality, value priced whitefish, shellfish and salmon products in Chile for the
Global Retail and Foodservice markets. An agreement to market certain sous-vide products was
signed by the parties and a commercial agreement regarding the purchase of certain raw materials
from Cuisine Solutions Chile was signed in fiscal year 2004. The plant began operations in August
2004. During the Companys second quarter of fiscal year 2005, Cuisine Solutions Chile conducted a
capital raise from its existing shareholders. In order to maintain the Companys 10% interest in
Cuisine Solutions Chile, the Company sold equipment from its discontinued facility in Norway to
Cuisine Solutions Chile in exchange for a note receivable of $500,000 payable in three
installments, all due before March 2005, and $500,000 in equity in Cuisine Solution Chile
(determined based upon cash invested by the majority shareholder of Cuisine Solutions, Chile). As
of April 2, 2005, the $500,000 note has been paid in full. Management recorded a discount of
$125,000 against the value of the equity received. Management believes that this discount is
appropriate because there is no ready market for the stock of Cuisine Solutions Chile, Cuisine
Solutions Chile has a limited operating history, and the Companys ownership stake represents only
a minority interest in Cuisine Solutions Chile. The Companys 10% equity investment in Cuisine
Solutions Chile is accounted for under the cost method as the Company does not have the ability to
exercise significant influence over the operating or financial policy of Cuisine Solutions Chile. Food Investors Corporation (FIC) and FRC are owned by the JLV Group. On October 22, 2003, the
Company entered into a six month term loan in the amount of $500,000 with FIC to provide short term
working capital necessary to expand operations. The loan accrued interest at 5% per annum and was
payable upon maturity. In April 2005, the loan was extended to October 22, 2005. Total
outstanding principal was $258,000 at April 2, 2005. In addition, on November 10, 2003, the
Company entered into a three-year term loan in the amount of $500,000 with FRC to provide working
capital necessary to expand operations. The loan bears interest of 5% per annum and is payable
upon maturity. Under this loan, Cuisine Solutions has been paying interest on a quarterly basis
since April 2004, with a balloon payment for the total amount due three years from the origination
of the loan. On July 10, 2004 the Company entered into an agreement with the Bank of Charles Town in West
Virginia for a $2,500,000 line of credit to finance its working capital requirements in the United
States. The line of credit is secured by the Companys US accounts receivable and inventory and
further guaranteed and secured with real estate owned by FIC. This line of credit bears an
interest rate of 0.5% over the prime interest rate (6% at April 2, 2005) and is renewable on
September 1, 2005. As of April 2, 2005, the outstanding principal was $2,074,000.  6)
    Discontinued Operations The Company discontinued its manufacturing operations in Norway on October 26, 2004 as the Company
had incurred consecutive losses from its operations in Norway since inception. The majority of the
machinery and equipment used in the Norway facility was sold to Cuisine Solutions Chile in exchange
for 8




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##### 



a note for $500,000, and equity in Cuisine Solutions Chile. As previously discussed, the fair
value of the equity was determined by management to be approximately $375,000. The Company recorded
a gain of approximately $571,000 as a result of the sale of the equipment in its second quarter of
fiscal year 2005. The salmon production from Norway has been replaced by the production of salmon
by Cuisine Solutions Chile. The assets and liabilities from discontinued operations at April 2, 2005 and June 26, 2004 are as
follows: April 2, 2005
    
    
    June 26, 2004Assets of discontinued operations:Restricted Cash
    
    $
    452,000
    
    
    $
    96,000Accounts receivable, net
    
    
    16,000
    
    
    
    83,000Other assets
    
    
    1,000
    
    
    
    345,000Fixed assets
    
    
    
    
    
    
    1,448,000Total assets of discontinued operations
    
    $
    469,000
    
    
    $
    1,972,000Liabilities of discontinued operations:Accounts payable and accrued liabilities
    
    $
    238,000
    
    
    $
    1,265,000Note payable
    
    
    1,492,000
    
    
    
    2,370,000Total liabilities of discontinued operations
    
    $
    1,730,000
    
    
    $
    3,635,000
 The note payable includes a $1,492,000 outstanding loan on a working capital overdraft line of
credit with Den Norske Bank. The overdraft facility is secured by cash deposit of $452,000 and a
letter of credit posted by the U.S. operations banking institution that is renewed semi-annually.
Long term investments of $1,093,000 and a $61,000 cash deposit have been pledged as collateral to
secure the letter of credit. The Company intends to liquidate the investments to satisfy the
outstanding debt obligation. In October 2004, an agreement was signed with Hjelmeland Kommune to release the Company from the
building lease in Norway. Since the lease was originally recorded as a capital lease, the capital
lease asset of approximately $1,349,000 and related lease liability of $1,291,000 were offset with
the difference being charged to the discontinued operations. The following amounts related to Cuisine Solutions Norway have been segregated from continuing
operations and reflected as follows: Sixteen weeks ended
    
    
    Forty weeks endedApr. 2, 2005
    
    
    Apr. 3, 2004
    
    
    Apr. 2, 2005
    
    
    Apr. 3, 2004Net Sales
    
    $
    
    
    
    $
    256,000
    
    
    $
    31,000
    
    
    $
    946,000Expenses:Cost of goods sold
    
    
    
    
    
    
    514,000
    
    
    
    113,000
    
    
    
    1,362,000Selling and administrative expense
    
    
    
    
    
    
    5,000
    
    
    
    1,000
    
    
    
    21,000Other operating expense
    
    
    
    
    
    
    
    
    
    
    463,000
    
    
    
    Interest expense
    
    
    
    
    
    
    56,000
    
    
    
    83,000
    
    
    
    95,000Other expense (income)
    
    
    
    
    
    
    (3,000
    )
    
    
    (1,000
    )
    
    
    (5,000
    )Loss from discontinued operations
    
    
    
    
    
    
    (316,000
    )
    
    
    (628,000
    )
    
    
    (527,000
    )Gain from disposal of assets
    
    
    
    
    
    
    
    
    
    
    571,000
    
    
    
    Net earnings (Loss) from
discontinued operations
    
    $
    
    
    
    $
    (316,000
    )
    
    $
    (57,000
    )
    
    $
    (527,000
    )
  7)
    Earnings (Loss) Per Share Basic earnings (loss) per common share is computed by dividing earnings (loss) by the weighted
average number of common shares outstanding during the period. Diluted earnings per common share
also includes common stock equivalents outstanding during the period if dilutive. The Companys
common stock equivalents consist of stock options. The weighted average number of shares
outstanding related to stock options was 2,903,941 and 2,893,589 for the sixteen weeks and forty weeks ended April 2, 2005, 9




---



##### 



respectively. For the sixteen weeks and forty weeks ended April 3, 2004, 2,760,074 and 2,252,730
common stock options were not included in the diluted earnings per share calculations as the effect
would be anti-dilutive.  8)
    Accounting for stock-based compensation The Company accounts for employee stock option grants using the intrinsic value method in
accordance with Accounting Principles Board (APB) Opinion No. 25 Accounting for Stock Issued to
Employees and related interpretations. Accordingly, compensation expense, if any, is measured as
the excess of the underlying stock price over the exercise price on the date of grant. The Company
complies with the disclosure provisions of Statement of Financial Accounting Standards (SFAS) No.
123 Accounting for Stock Based Compensation, as amended by SFAS No. 148 Accounting for
Stock-Based CompensationTransition and Disclosure which requires pro-forma disclosure of
compensation expense associated with stock options under the fair value method. Had compensation cost been recognized based on the fair values of options at the grant dates
consistent with the provisions of SFAS No. 123, the Companys earnings (loss) and basic and diluted
earnings (loss) per common share would have been as follows: Sixteen weeks ended
    
    
    Forty weeks endedApr. 2, 2005
    
    
    Apr. 3, 2004
    
    
    Apr. 2, 2005
    
    
    Apr. 3, 2004Net earnings (loss) applicable to common
shareholders
    
    $
    511,000
    
    
    $
    (562,000
    )
    
    $
    1,266,000
    
    
    $
    (680,000
    )Add: Stock-based employee compensation cost
included in reported net earnings (loss)
    
    $
    47,000
    
    
    $
    49,000
    
    
    $
    131,000
    
    
    $
    49,000Less: Total stock-based compensation expense
Determined under the fair value method
    
    $
    (224,000
    )
    
    $
    (84,000
    )
    
    $
    (482,000
    )
    
    $
    (202,000
    )Pro forma net earnings (loss)
    
    $
    334,000
    
    
    $
    (597,000
    )
    
    $
    915,000
    
    
    $
    (833,000
    )Earnings (Loss) per common share:Basic  as reported
    
    $
    0.03
    
    
    $
    (0.04
    )
    
    $
    0.08
    
    
    $
    (0.04
    )Diluted  as reported
    
    $
    0.03
    
    
    $
    (0.04
    )
    
    $
    0.08
    
    
    $
    (0.04
    )Basic  pro forma
    
    $
    0.02
    
    
    $
    (0.03
    )
    
    $
    0.06
    
    
    $
    (0.05
    )Diluted  pro forma
    
    $
    0.02
    
    
    $
    (0.03
    )
    
    $
    0.06
    
    
    $
    (0.05
    )Weighted average common shares outstanding-basic
    
    
    15,947,547
    
    
    
    15,826,931
    
    
    
    15,909,930
    
    
    
    15,825,645Common stock equivalents
    
    
    1,772,690
    
    
    
    
    
    
    
    1,506,989
    
    
    
    Weighted average common shares
outstanding-diluted
    
    
    17,720,237
    
    
    
    15,826,931
    
    
    
    17,416,919
    
    
    
    15,825,645
  9)
    Recent Accounting Pronouncements In December 2004, Financial Accounting Standard Board (FASB) issued Statement of Financial
Accounting Standard (SFAS) 123 (Revised 2004),
Shared-Based Payment. Revised SFAS 123(R)
addresses the requirements of an entity to measure the cost of employee services received in
exchange for an award of equity instruments based on the grant-date fair value of the award. The
cost of such award will be recognized over the period during which an employee is required to
provide services in exchange for the award. The Company will be required to adopt this Statement
during the first quarter of fiscal year 2006. The Company is currently evaluating the impact that
this pronouncement will have on its future operations. In December 2004, FASB issued SFAS 151, Inventory Costs an amendment of ARB No. 43, Chapter 4.
This Statement requires abnormal amounts of idle facility expense, freight, handling costs and
wasted material be recognized as current-period charges regardless of whether they meet the
criterion of so abnormal. In addition, this Statement requires that allocation of fixed
production overhead to the costs of conversion be based on the normal capacity of the production
facilities. This pronouncement will be effective for fiscal year 2006. However, as the Company
does not include amounts of idle facility expense, freight, handling costs and wasted material in
its inventory, the adoption of SFAS 151 will not have a material impact on the Companys financial
position or results of operations. 10




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations The company and its representatives may from time to time make written or oral forward-looking
statements, including statements contained in the Companys filings with the SEC, in its reports to
shareholders and in press releases. One can identify these forward-looking statements by use of
words such as strategy, expects, plans, anticipates, believes, will, continues,
estimates, intends, projects, goals, targets and other words of similar meaning. One can
also identify them by the fact that they do not relate strictly to historical or current facts.
The Company cannot guarantee that any forward-looking statement will be realized, although it
believes that it has been prudent in its plans and assumptions. Achievement of future results is
subject to risks, uncertainties, and the possibility of inaccurate assumptions. Should known or
unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate,
actual results could vary materially from those anticipated, estimated, or projected. Investors
should bear this in mind as they consider forward-looking statements and whether to invest in or
remain invested in the Companys securities. In connection with the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, the Company is hereby identifying important
factors that could cause actual results and outcomes to differ materially from those contained in
any forward-looking statement make by or on behalf of the Company; any such statement is qualified
by reference to the following cautionary statements. It is not possible to predict or identify all
risk factors. Consequently, the following should not be considered a complete discussion of all
potential risks or uncertainties. The Company does not undertake to update any forward-looking
statement that it may make from time to time. Among the factors that could cause the Companys actual results to differ from such forward-looking
statements are factors relating to:  (a)
    a significant change of the Companys relationship with its customers in channels where
concentration of sales to certain number of customers exists;(b)
    the impacts on the Companys profitability from the fluctuations in the availability and cost
of raw materials;(c)
    the impacts on the Companys reported earnings from fluctuations in foreign currency exchange
rates, particularly the Euro and Norwegian Kroner. In addition, the Companys results may also be affected by general factors, such as economic
conditions, political developments, interest and inflation rates, accounting standards, and laws
and regulations in markets where the Company competes. CRITICAL ACCOUNTING ESTIMATES A summary of the Companys significant accounting policies is discussed below. Management believes
that the application of these policies on a consistent basis enables the Company to provide the
users of the financial statements with useful and reliable information about the Companys
operating results and financial condition. The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and
the reported amounts of revenue and expenses. Judgments and assessments of uncertainties are
required in applying the Companys accounting policies to areas including the allowance for
doubtful accounts, inventory obsolescence reserve and deferred tax valuation allowance. Management
bases its judgments and estimates on current and historical data, past experience and other
assumptions and information that it believes are reasonable and reliable. Trade receivables are reported in the consolidated balance sheets net of the allowance for doubtful
accounts. Generally, the Company considers receivables past due 30 days subsequent to the billing
date. The Company performs ongoing credit evaluations of its customers and generally extends credit
without 11




---



##### 



requiring collateral. The Company maintains an allowance for doubtful accounts, which is
determined based on historical collection experience or changes in the financial condition of our customers. As
these factors change, our allowance for doubtful accounts may change in subsequent accounting
periods. Generally, losses have historically been within managements expectations. As of April 2,
2005, the Company maintained an allowance for doubtful accounts of approximately $415,000, or 9.9%
of total receivable balance. The Company determines the inventory obsolescence reserve based on the aging or spoilage of
product. Additional reserves are sometimes established as a result of lack of marketability or
changes in customer consumption patterns. Managements judgment is necessary in determining the
realizable value of those products to arrive at the proper obsolescence reserve. The inventory
obsolescence reserve as of April 2, 2005 was $217,000, or 2.6% of total inventory. The Company accounts for corporate income taxes in accordance with SFAS No. 109, Accounting for
Income Taxes, which requires an asset and liability approach. This approach results in the
recognition of deferred tax assets (future tax benefits) and liabilities for the expected future
tax consequences of temporary timing differences between the book carrying amounts and the tax
basis of assets and liabilities. Future tax benefits are subject to a valuation allowance to the
extent of the likelihood that the deferred tax assets may not be realized. The Company has fully
reserved its deferred tax asset given its history of operating losses. RECENT ACCOUNTING PRONOUCEMENTS In December 2004, Financial Accounting Standard Board (FASB) issued Statement of Financial
Accounting Standard (SFAS) 123 (Revised 2004),
Shared-Based Payment. Revised SFAS 123(R)
addresses the requirements of an entity to measure the cost of employee services received in
exchange for an award of equity instruments based on the grant-date fair value of the award. The
cost of such award will be recognized over the period during which an employee is required to
provide services in exchange for the award. The Company will be required to adopt this Statement
during the first quarter of fiscal year 2006. The Company is currently evaluating the impact that
this pronouncement will have on its future operations. In December 2004, FASB issued SFAS 151, Inventory Costs an amendment of ARB No. 43, Chapter 4.
This Statement requires abnormal amounts of idle facility expense, freight, handling costs and
wasted material be recognized as current-period charges regardless of whether they meet the
criterion of so abnormal. In addition, this Statement requires that allocation of fixed
production overhead to the costs of conversion be based on the normal capacity of the production
facilities. This pronouncement will be effective for fiscal year 2006. However, as the Company
does not include amounts of idle facility expense, freight, handling costs and wasted material in
its inventory, the adoption of SFAS 151 will not have a material impact on the Companys financial
position or results of operations. RESULTS OF OPERATIONS Revenue in the third quarter of fiscal 2005 increased $3,442,000 from $10,913,000 to $14,355,000, a
31.5% increase compared to the same quarter of the previous fiscal year due primarily to stronger
sales in the Military, Food Service, and On Board Services channels. US Military sales rose by
832.9%, due to the increased demand from the US Army overseas, and sales within the Food Service
channel improved 42.3%, due to the strong growth in Europe, while On Board Services sales increased
by 25.6% due to continued improvement in the travel industry, compared to the third quarter of
fiscal 2004. The Company reported net earnings from continuing operations for the third quarter of fiscal year
2005 of $511,000 compared to a loss of $246,000 for the same quarter of fiscal year 2004. The
307.7% increase in net earnings from continuing operations was primarily due to a 31.5% increase in
sales and a 60.2% increase in gross margin, as a result of the higher sales and the corresponding
production and procurement efficiencies achieved. 12




---



##### 



NET SALES Third quarter 2005 revenue of $14,355,000 increased by 31.5% compared to the previous fiscal years
third quarter revenue of $10,913,000. US and France sales grew 31.8% and 31.1%, respectively,
compared to the same quarter in fiscal year 2004. Information as to the Companys sales by
geographical locations are as follows: Q3 Fiscal 2005
    
    
    Q3 Fiscal 2004
    
    

$ Change
    
    

%ChangeUSA
    
    $
    9,113,000
    
    
    $
    6,916,000
    
    
    $
    2,197,000
    
    
    
    31.8
    %France
    
    
    5,242,000
    
    
    
    3,997,000
    
    
    
    1,245,000
    
    
    
    31.1
    %Total Net Sales
    
    $
    14,355,000
    
    
    $
    10,913,000
    
    
    $
    3,442,000
    
    
    
    31.5
    %
 US SALES Cuisine Solutions US Fiscal Years 2005 and 2004 third quarter sales by sales channel are as
follows: Q3 FY05
    
    
    Q3 FY04
    
    
    $Change
    
    
    %ChangeFood Service
    
    $
    1,861,000
    
    
    $
    1,786,000
    
    
    $
    75,000
    
    
    
    4.2
    %On Board Services
    
    
    3,285,000
    
    
    
    2,579,000
    
    
    
    706,000
    
    
    
    27.4
    %Retail
    
    
    1,387,000
    
    
    
    1,762,000
    
    
    
    (375,000
    )
    
    
    (21.3
    %)Military
    
    
    2,015,000
    
    
    
    216,000
    
    
    
    1,799,000
    
    
    
    832.9
    %National Restaurant Chain
    
    
    565,000
    
    
    
    573,000
    
    
    
    (8,000
    )
    
    
    (1.4
    %)Total
    
    $
    9,113,000
    
    
    $
    6,916,000
    
    
    $
    2,197,000
    
    
    
    31.8
    %
 Fiscal year 2005 third quarter sales increased $2,197,000 to $9,113,000, a 31.8% increase from the
previous fiscal year third quarter sales of $6,916,000. Food Service sales for the third quarter fiscal year 2005 increased $75,000, or 4.2%, to $1,861,000
as compared to the same quarter of fiscal year 2004 of $1,786,000. The increase in this period was
due primarily to increased sales to hotels and conventions centers for special events, partially
offset by the diminished demand for low carbohydrate products. Fiscal year 2005 third quarter sales from the On Board Services channel totaled $3,285,000 compared
to previous year third quarter sales of $2,579,000, an increase of $706,000 or 27.4%. Sales to the
On Board Services channel increased in the third quarter as US airlines and passenger rails
continued their recovery. Although the airline industry is still experiencing significant
financial problems, the first class and business class food that the Company provides has increased
as the number of passengers has increased and the number of the Company product offerings has
increased. Retail sales for the third quarter of fiscal 2005 decreased $375,000 (or 21.3%) to $1,387,000 from
$1,762,000, compared to the same period of the previous fiscal year due primarily to managements
decision to exit from a certain low-margin accounts in this channel. Military sales for the third quarter 2005 increased 832.9% to $2,015,000 from $216,000 in fiscal
2004 primarily due to the increased demand from the US Army. The Company began delivering items
for the Army Field Rations program called the Unitized Group Rations A (UGRA) menu in October 2004.
Since the second quarter of fiscal year 2005, the US Army has begun to supply these products to
locations such as Iraq and Afghanistan. National Restaurant Chain sales for the third quarter of fiscal year 2005 totaled $565,000, and
were comparable to sales of $573,000 in fiscal 2004. The small decrease in sales of $8,000 (or
1.4%) is due to decreased sales to some existing customers. The Company will continue to pursue
its role as a supplier for 13




---



##### 



national restaurant chains who consider the Companys product quality and ease of use an attractive
alternative for providing promotional menu items. FRANCE SALES Cuisine Solutions France fiscal year 2005 third quarter sales compared to the prior year third
quarter and respective exchange rates are as follows: Fiscal 2005
    
    
    Fiscal 2004France Q3 Sales
    
    
    France Q3 Sales
    
    
    $Change
    
    
    %ChangeSales in US Dollars
    
    $
    5,242,000
    
    
    $
    3,997,000
    
    
    $
    1,245,000
    
    
    
    31.1
    %Sales in Euros
    
    
    4,004,000
    
    
    
    3,207,000
    
    
    
    797,000
    
    
    
    24.9
    %Average Exchange Rate
    
    
    0.764
    
    
    
    0.802
 The total fiscal year 2005 third quarter sales in US Dollars were $5,242,000 versus previous year
sales of $3,997,000, an increase of $1,245,000 or 31.1%. Sales in Euros during the same period were
4,004,000 versus 3,207,000 respectively, an increase of 24.9%. The increase was due to the US
dollar  Euro fluctuation and the increase in food service channel which resulted from domestic
demand and aggressive sales efforts. Cuisine Solutions France fiscal year 2005 third quarter sales by sales channel were as follows: Q3 FY05
    
    
    Q3 FY04
    
    
    $Change
    
    
    %ChangeFood Service
    
    $
    2,926,000
    
    
    $
    1,577,000
    
    
    $
    1,349,000
    
    
    
    85.5
    %On Board Services
    
    
    578,000
    
    
    
    496,000
    
    
    
    82,000
    
    
    
    16.5
    %Retail
    
    
    1,727,000
    
    
    
    1,907,000
    
    
    
    (180,000
    )
    
    
    (9.4
    %)New Business
    
    
    11,000
    
    
    
    17,000
    
    
    
    (6,000
    )
    
    
    (35.3
    %)Total
    
    $
    5,242,000
    
    
    $
    3,997,000
    
    
    $
    1,245,000
    
    
    
    31.1
    %
 Food Service sales grew $1,349,000, or 85.5%, to $2,926,000 compared to the third quarter of fiscal
year 2004 due primarily to an increase in sales efforts in the channel, and the On Board Services
channel grew 16.5% compared to the same quarter of Fiscal 2004 as airlines in Europe continued
their recovery . The retail sales decreased $180,000 in the third quarter of fiscal year 2005,
compared to same period fiscal year 2004, largely due to the phasing-out of low margin private
label items. GROSS MARGIN A comparison of net sales, gross margin and net earnings from operations follows: Quarter EndedApr. 2, 2005
    
    
    Apr. 3, 2004
    
    
    % Change(Dollars in thousands)Net Sales
    
    $
    14,355
    
    
    $
    10,913
    
    
    
    31.5
    %Gross margin
    
    
    3,802
    
    
    
    2,374
    
    
    
    60.2
    %Gross margin percentage
    
    
    26.5
    %
    
    
    21.8
    %Earnings from continuing operations
    
    $
    511
    
    
    ($
    246
    )
    
    
    307.7
    %Net earnings
    
    $
    511
    
    
    ($
    562
    )
    
    
    190.9
    %
 Gross margin increased 60.2% compared to the third quarter fiscal year 2004 due primarily to
significantly higher sales, production efficiencies, and better management control over procurement
costs in relation to 14




---



##### 



those sales. The Company has strategically built sales channels over the past few years to include
military and retail accounts and meals for passenger rail lines, and has seen consistent results in
its French subsidiary. Gross margin as a percentage of sales should continue to increase as sales
improve and certain production costs remain fixed. For the third quarter 2005, gross margin as a percentage of sales in the US increased from 23.5% to
28.9%, due to the Companys ability to maintain a higher production volume during the period and
improved management control over production planning and procurement costs. The gross margin in
France increased from 18.8% to 22.3%, for the same period due to production and procurement
efficiencies in relation to those sales. The Company expects sales volume to continue to increase
and that continued cost management and production planning will result in higher gross margins for
the remainder of fiscal 2005. Selling and Administrative Expenses A comparison of selling and administrative costs by geographic location is as follows: Q3 Fiscal 2005
    
    
    Q3 Fiscal 2004
    
    
    $Change
    
    
    %ChangeUSA
    
    $
    2,187,000
    
    
    $
    1,895,000
    
    
    $
    292,000
    
    
    
    15.4
    %France
    
    
    890,000
    
    
    
    603,000
    
    
    
    287,000
    
    
    
    47.6
    %Total SG&A Expenses
    
    $
    3,077,000
    
    
    $
    2,498,000
    
    
    $
    579,000
    
    
    
    23.2
    %
 Selling and administrative expenses increased $579,000 or 23.2% in the third quarter of fiscal 2005
compared to the third quarter of fiscal 2004. Increases in such expenses over the prior year are
mainly the result of hiring additional sales and marketing personnel. Selling and administrative
expenses as a percentage of sales decreased to 21.4% in the third quarter of fiscal 2005 compared
to 22.9% in the same quarter of fiscal year 2004 as a result of cost cutting strategies implemented
in previous years. Management will continue to monitor such costs to ensure that they are aligned
with expected business volume. Depreciation and Amortization Depreciation and amortization increased $42,000 to $231,000 for the third quarter of fiscal year
2005, compared with $189,000 for the same period in 2004. This increase is related to the purchase
of equipment in the US and France. Non-operating Income and Expense from Continuing Operations Investment income consists of income earned on funds invested in corporate bonds and treasury
bills. Management maintains these funds in a trust account with the majority of the funds invested
in government securities. Interest expense relates to outstanding borrowings in the US and France. Interest expense has
increased over the prior period as a result of the Companys need to borrow funds to finance
increased production volume. Also included in the Non-operating Income (Expense) from Continuing Operations are foreign exchange
losses of $8,000 and $34,000 for the sixteen weeks ended April 2, 2005 and April 3, 2004,
respectively. Provision for Taxes 15




---



##### 



No provision for income taxes was recorded during the third quarter of fiscal 2005 given the
Companys history of losses. Management will continue to evaluate the Companys ability to benefit
from its deferred tax assets and make adjustments as necessary to the valuation allowance. 16




---



##### 



Discontinued Operations The Companys Board of Directors approved a plan to discontinue its manufacturing operations in
Norway on October 26, 2004 as the Company had incurred consecutive losses from its operations in
Norway since inception. The majority of the machinery and equipment used in the Norway facility
was sold to Cuisine Solutions Chile in exchange for a note for $500,000, payable to the Company in
three installments, all due before March 2005 and equity in Cuisine Solutions Chile. As explained
in Note 5 to the Unaudited Consolidated Financial Statements, the fair value of the equity was
determined by management to be approximately $375,000. The Company recorded a gain of approximately
$571,000 as a result of the sale of the equipment in its second quarter of fiscal year 2005. The
salmon production from Norway has been replaced by the production of salmon by Cuisine Solutions
Chile. 17




---



##### 



Forty Weeks Ended April 2, 2005 Compared to Forty Weeks Ended April 3, 2004 RESULTS OF OPERATIONS Revenue for the first three quarters of fiscal 2005 increased $7,709,000 from $26,411,000 to
$34,120,000, a 29.2% increase compared to same period of the previous year, primarily due to the
increased sales in all sales channels in the US and most of the channels in France. The Company reported a net earnings of $1,323,000 from continuing operations for the three quarters
of fiscal 2005, or a 964.7% increase, compared to the net loss from continuing operations of
$153,000 in 2004. The increase in earnings was primarily driven by a 29.2% increase in sales and
lower cost of goods sold due to manpower and production efficiencies and lower raw material cost.
The Company reported a loss of $57,000 from discontinued operations, compared with the loss of
$527,000 in same period last year, as a result of the discontinuation of its Norway manufacturing
operations in October 2004, as further described in note 6 of the Notes to the Unaudited
Consolidated Financial Statements. NET SALES The revenues for the first three quarters of fiscal 2005 YTD and fiscal 2004 YTD by geographic
location are as follows: YTD Fiscal 2005
    
    
    YTD Fiscal 2004
    
    
    $Change
    
    
    %ChangeUSA
    
    $
    22,371,000
    
    
    $
    16,452,000
    
    
    $
    5,919,000
    
    
    
    36.0
    %France
    
    
    11,749,000
    
    
    
    9,959,000
    
    
    
    1,790,000
    
    
    
    18.0
    %Total Net Sales
    
    $
    34,120,000
    
    
    $
    26,411,000
    
    
    $
    7,709,000
    
    
    
    29.2
    %
 US SALES Fiscal year 2005 YTD sales increased $5,919,000 to $22,371,000, a 36.0% increase from the previous
fiscal year YTD sales of $16,452,000. Cuisine Solutions US Fiscal Years 2005 and 2004 YTD sales by sales channel are as follows: YTD FY05
    
    
    YTD FY04
    
    
    $Change
    
    
    %ChangeFood Service
    
    $
    4,585,000
    
    
    $
    4,242,000
    
    
    $
    343,000
    
    
    
    8.1
    %On Board Services
    
    
    8,466,000
    
    
    
    6,826,000
    
    
    
    1,640,000
    
    
    
    24.0
    %Retail
    
    
    3,941,000
    
    
    
    3,285,000
    
    
    
    656,000
    
    
    
    20.0
    %Military
    
    
    4,000,000
    
    
    
    867,000
    
    
    
    3,133,000
    
    
    
    361.4
    %National Restaurant Chain
    
    
    1,379,000
    
    
    
    1,232,000
    
    
    
    147,000
    
    
    
    11.9
    %Total
    
    $
    22,371,000
    
    
    $
    16,452,000
    
    
    $
    5,919,000
    
    
    
    36.0
    %
 Food Service revenue increased 8.1% or $343,000 compared to the same period of fiscal year 2004.
The increase is due to an increase in sales to hotels and convention centers for special events as
a result of the Companys focused sales effort and higher corporate spending on conventions. Fiscal year 2005 YTD sales from the On Board Services channel totaled $8,466,000 compared to
previous fiscal sales of $6,826,000, an increase of $1,640,000 or 24.0%. Sales to the On Board
Services channel increased as US airlines and passenger rails continued their recovery. The On
Board Services channel continued to increase the number of products it provides to the carriers who
continue to provide in-flight meals. 18




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##### 



Retail sales in fiscal 2005 increased $656,000, or 20.0%, to $3,941,000 from $3,285,000, due
primarily to the expanded product roll-out of Cuisine Solutions brand frozen food items to North
American retailers. Military sales for fiscal 2005 YTD increased 361.4% to $4,000,000 from $867,000 compared to fiscal
2004 primarily due to the increased sales to the US Army and Navy. Cuisine Solutions began
delivering items for the Army Field Rations program called the Unitized Group Rations A (UGRA) menu
in October 2004. The US Army has been supplying these products to locations such as Iraq and
Afghanistan since the second quarter of fiscal year 2005. National Restaurant Chain sales for the three quarters of fiscal year 2005 totaled $1,379,000, up
from $1,232,000 in fiscal 2004. The sales increase of $147,000, or 11.9%, is attributed to
increased sales to existing national restaurant chain customers as well as limited sales to new
customers. The Company will further pursue its role as a supplier for national restaurant chains
who consider the Companys product quality and ease of use an attractive alternative for providing
promotional menu items. FRANCE SALES Cuisine Solutions Frances fiscal year 2005 YTD sales compared to prior year and respective
exchange rates are as follows: Fiscal 2005
    
    
    Fiscal 2004France YTD Sales
    
    
    France YTD Sales
    
    
    $Change
    
    
    %ChangeSales in US Dollars
    
    $
    11,749,000
    
    
    $
    9,959,000
    
    
    $
    1,790,000
    
    
    
    18.0
    %Sales in Euros
    
    
    9,219,000
    
    
    
    8,399,000
    
    
    
    820,000
    
    
    
    9.8
    %Average Exchange Rate
    
    
    0.785
    
    
    
    0.843
 Total fiscal year 2005 YTD sales in US Dollars were $11,749,000 compared to previous year sales of
$9,959,000, an increase of $1,790,000 or 18.0%. Sales in Euros during the same period were
9,219,000 compared to 8,399,000, an increase of 9.8%. The increases are due partly to the
stronger demand in Food Service and On Board Services channels and partly due to the fluctuations
in the exchange rate for the respective periods. Cuisine Solutions France fiscal year 2005 sales by sales channel were as follows: YTD FY05
    
    
    YTD FY04
    
    
    $Change
    
    
    %ChangeFood Service
    
    $
    5,942,000
    
    
    $
    3,799,000
    
    
    $
    2,143,000
    
    
    
    56.4
    %On Board Services
    
    
    1,634,000
    
    
    
    1,391,000
    
    
    
    243,000
    
    
    
    17.5
    %Retail
    
    
    4,121,000
    
    
    
    4,745,000
    
    
    
    (624,000
    )
    
    
    (13.2
    %)New Business
    
    
    52,000
    
    
    
    24,000
    
    
    
    28,000
    
    
    
    116.7
    %Total
    
    $
    11,749,000
    
    
    $
    9,959,000
    
    
    $
    1,790,000
    
    
    
    18.0
    %
 The On Board Services channel in France grew 17.5% compared to the same period of Fiscal 2004,
while Food Service channel grew $2,143,000, or 56.4%, to $5,942,000 compared to the fiscal year
2004 primarily due to increased sales effort and strong demand from existing customers. Retail
sales decreased $624,000 compared to fiscal year 2004 largely due to the phasing-out of low margin
private label items. The changes expressed in US dollars were impacted by fluctuations in the
exchange rate for the reporting periods. 19




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##### 



GROSS MARGIN A comparison of net sales, gross margin and net earnings from operations follows: Year to DateApr. 2, 2005
    
    
    Apr. 3, 2004
    
    
    % Change(Dollars in thousands)Net Sales
    
    $
    34,120
    
    
    $
    26,411
    
    
    
    29.2
    %Gross margin
    
    
    8,828
    
    
    
    5,830
    
    
    
    51.4
    %Gross margin percentage
    
    
    25.9
    %
    
    
    22.1
    %Earnings from continuing operations
    
    $
    1,323
    
    
    ($
    153
    )
    
    
    964.7
    %Net earnings (loss)
    
    $
    1,266
    
    
    ($
    680
    )
    
    
    286.2
    %
 Gross margin increased 51.4% compared to fiscal year 2004 due primarily to significantly higher
sales, increased production efficiencies, and better control over procurement costs. Gross margin
as a percentage of sales should continue to increase as sales improve and certain costs remain
fixed. Gross margin as a percentage of sales in the US increased from 24.3% to 28.2% due to the Companys
ability to maintain a higher production volume during the period. The gross margin in France
increased from 18.5% to 21.4% due to production and procurement efficiencies in relation to those
sales. Cuisine Solutions management is confident that continued larger sales volume, cost
management and production planning will result in high gross margins. Selling and Administrative Expenses A comparison of selling and administrative costs by region on is as follows: YTD Fiscal 2005
    
    
    YTD Fiscal 2004
    
    
    $Change
    
    
    %ChangeUSA
    
    $
    5,206,000
    
    
    $
    4,288,000
    
    
    $
    918,000
    
    
    
    21.4
    %France
    
    
    1,814,000
    
    
    
    1,310,000
    
    
    
    504,000
    
    
    
    38.5
    %Total SG&A Expenses
    
    $
    7,020,000
    
    
    $
    5,598,000
    
    
    $
    1,422,000
    
    
    
    25.4
    %
 Selling and administrative expenses increased $1,422,000 or 25.4% in fiscal 2005 compared to the
same period of fiscal 2004. Expenses as a percentage of sales decreased slightly to 20.6% in
fiscal 2005 compared to the 21.2% same period in fiscal year 2004. The increase in selling expenses
is mainly attributed to additional sales and administrative personnel hired, as well as selling and
marketing expenses, to handle the growth in US and France. Management will continue to monitor
such costs to ensure that they are aligned with expected business volume. Depreciation and Amortization Depreciation and amortization increased $42,000 to $587,000 for the first three quarters of fiscal
year 2005, compared with $545,000 for the same period in 2004. This increase is a result of
purchases of equipment in the US and France. Discontinued Operations The Companys Board of Directors approved a plan to discontinue its manufacturing operations in
Norway on October 26, 2004 as the Company had incurred consecutive losses from its operations in
Norway since inception. The majority of the machinery and equipment used in the Norway facility
was sold to Cuisine Solutions Chile in exchange for a note for $500,000, payable to the Company in
three installments, all due before March 2005, and equity in Cuisine Solutions Chile. The note of
$500,000 was paid in full as of April 2, 2005. As explained in Note 5 to the Unaudited
Consolidated Financial Statements, the fair value 20




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of the equity was determined by management to be approximately $375,000. The Company recorded a gain
of approximately $571,000 as a result of the sale of the equipment in its second quarter of fiscal
year 2005. The salmon production from Norway has been replaced by the production of salmon by
Cuisine Solutions Chile. The discontinued operations in Norway had reported a $57,000 loss for the first three quarters
fiscal year 2005 as compared to a loss of $527,000 same period last year. The loss in the first
three quarters 2005 includes a gain on disposal of equipment of $571,000, and the loss of $628,000
associated with the discontinued operations. In October 2004, an agreement was signed with
Hjelmeland Kommune to release the Company from the building lease in Norway. Since the lease was
originally recorded as a capital lease, the capital lease asset of approximately $1,349,000 and
related lease liability of $1,291,000 were offset with the difference being charged to discontinued
operations. The Company was required, by local law in Norway, to provide notification of
termination to all employees prior to the board of director approval to discontinue operations. At
the end of the third quarter, all severance payments were paid to such employees. Impact of Inflation and the Economy Variations in labor and ingredient costs can significantly affect the Companys operations. Many
of the Companys employees are paid hourly rates related to, but generally higher than the federal
minimum rates. The Companys sales pricing structure allows for the fluctuation of raw material prices. As a
result, market price variations do not significantly affect the gross margin realized on product
sales. Customer sensitivity to price changes can influence the overall sale of individual
products. In the event of accelerated commodity price increases, the Company may suffer a
short-term loss since customers cannot accept multiple price changes in short periods of time. The
Company will continue to investigate larger purchase contracts for key raw materials where pricing
to the customer can also be contracted. In an effort to increase diversification to lower the impact of various economic events, management
has re-focused its efforts to diversify sales in order to attain an even mix between sales
channels. During the three quarters of fiscal year 2005, the sales to the On Board Services
channel, primarily airline and railroad accounts, were 29.6% of total revenues. Sales to the
Foodservice Industry was 30.9%, primarily to hotel, restaurants and banquets, and 23.6% of sales
were generated from the Retail channel. Military sales, to both the US Army and Navy, accounted
for 11.7% of the total sales during the three quarters of fiscal year 2005. Management has also
placed increased focus on the National Restaurant Chain in the US. Liquidity and Capital Resources At April 2, 2005, the Companys cash and cash equivalents were $903,000, compared with $1,395,000
at June 26, 2004. The decrease is primarily the result of cash used in operations and capital
expenditure of $1,607,000 and $846,000, respectively, offset by borrowings on the line of credit
and an equipment loan. Additionally, the Company held long term investments of $1,093,000 and
$1,114,000 at April 2, 2005 and June 26, 2004, respectively. Long term investments of $1,093,000
and a cash deposit of $61,000 were used as collateral for the Standby Letter of Credit, as well as
a cash deposit of $452,000, that secures the overdraft facility of the Norwegian subsidiary. There
were no other restrictions on cash balances at April 2, 2005. Net cash used by operations amounted to
$1,607,000 for the first three quarters of fiscal 2005,
compared to cash used of
$842,000 for the same period in fiscal 2004. In the first three
quarters of fiscal 2005, the Company used
$2,779,000 to increase its inventory to accommodate its
increase business from all sales channels. Cash in the amount of
$846,000 was used by investing
activities largely due to the investment in new production equipment. Financing activities
provided net cash of $1,850,000. At April 2, 2005, the Company had borrowings of $3,636,000, bearing interest at rates ranging from
3.3% to 6.75%. 21




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##### 



In December 2000, Cuisine Solutions France, a wholly owned subsidiary of the Company, entered into
a five-year capital lease obligation for a cooking machine with an initial principal amount of
$435,000 and 6% interest on the outstanding balance of the lease. The outstanding principal totaled
$55,000 at April 2, 2005. In October 2002, Cuisine Solutions France entered into a ten year term
loan to finance the acquisition of land and a building to be used as a distribution plant in the
amount of 190,000 or $217,000 based on the exchange rate as of April 2, 2005. This loan bears
interest of 5.7% annually and is due in October 2012. The current portion of this loan is 15,000
(or $20,000) and the outstanding principal totaled 154,000 (or $199,000) at April 2, 2005. In
March 2003, Cuisine Solutions France entered into a five year term loan to further expand the
facility. This loan bears interest of 3.3% and the outstanding principal totaled  187,000 (or
$242,000) at April 2, 2005, with a current portion of 52,000 (or $68,000). In June 2004, Cuisine
Solutions France entered into a four year term loan to finance its new computer server and
packaging line equipment in the amount of 57,000 or $69,000. The loan bears interest of 3.95% and
the total outstanding principal was  47,000 (or $61,000) at April 2, 2005, with a current portion
of 14,000 (or $17,000).
On April 2, 2005, Cuisine Solutions France had an outstanding balance of 14,000 (or $18,000)
against its unsecured overdraft line-of-credit established with its bank. The overdraft facility has a credit limit of
150,000 (or $194,000) and bears a 2.96% interest rate as of April 2, 2005. On October 22, 2003, the Company entered into a six month term loan in the amount of $500,000 with
FIC to provide working capital necessary to expand US operations. The loan accrued interest at 5%
per annum and was payable upon maturity. In April 2005, the loan was extended to October 22, 2005.
Total outstanding principal was $258,000 at April 2, 2005. In addition, on November 10, 2003, the
Company entered into a three-year term loan in the amount of $500,000 with FRC to provide working
capital to its US operations. The loan bears interest of 5% per annum and is payable upon
maturity. Under this loan, Cuisine Solutions pays interest on a quarterly basis beginning in April
2004, with a balloon payment for the total amount due three years from the origination of the loan.
As discussed in Note 5, FIC and FRC are controlled by Cuisine Solutions majority shareholder, the
JLV Group. On July 10, 2004, the Company entered into an agreement with the Bank of Charles Town in West
Virginia for a $2,500,000 line of credit to finance its working capital requirements in the US.
The line of credit is secured by the Companys US accounts receivable and inventory and further
guaranteed by FIC and secured by real estate owned by FIC. This line of credit bears an interest
rate of 0.5% over the prime interest rate, or 6.0% as of April 2, 2005, and is renewable on
September 1, 2005. The outstanding principal was $2,074,000 as of April 2, 2005. On March 15,
2005, the Company entered into a five years term loan with the Bank of Charles Town in the amount
of $200,000 to finance its purchase of production equipment. This loan bears a fixed interest rate
of 6.75%, matures on March 15, 2010, and is secured by the equipment. As of April 2, 2005, the
outstanding principal was $200,000 with a current portion of $35,000. The Companys discontinued Norwegian subsidiary has an outstanding working capital commitment for
its liquidity needs in the form of an overdraft facility. As of April 2, 2005, the Company had an
outstanding balance of $1,491,000 under this credit facility. The Company intends to liquidate its
long-term investments to satisfy this debt obligation. 22




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##### 



Future Prospects The Company anticipates strong growth in sales in the US and moderate growth in France during the
remainder of fiscal year 2005. Effort will be made to grow all channels in both the US and France
as a hedge against a disruption in any one channel in any geographic location. Food Service The Food Service channel will continue to manage the hotel, resort and convention center restaurant
and banquet menu programs while working to reduce distribution costs of shipping directly to the
customers facilities. The fiscal 2005 strategy involves the continued penetration into large key
national accounts, banquet centers and casinos. Demand has started to level-off in the US for Low
Carbohydrate items in the Food Service channel. Demand for food service products in France
increased significantly during the past two years and we expect further growth for the remainder of
fiscal year 2005 due to continued satisfaction with the quality and variety of products offered by
the Company and an increase number of sales people to further penetrate this channel. Customers in
the Food Service sales channel place high value on the labor savings, quality, consistency, and
food safety associated with Cuisine Solutions products. Management will work to find new growth
strategies for this channel, including adding sales personnel where appropriate and improving
distribution to our customers. On Board Services On Board Services was highly affected by the slowdown of the travel industry after September 2001.
However, close customer focus has continued to show very positive results over the last year.
Cuisine Solutions will continue to pursue growth by increasing the number of menu items sold to
each of its customers working directly and indirectly with the airlines and railways in the US and
in Europe. As the airline and related support industries search for more options to reduce costs
and consolidate their workforces, management is exploring opportunities with airlines to provide
them with high quality, fully cooked first class and business class meals that may provide greater
flexibility and less labor to the customers. There is still instability and risk associated with
this market, and management is taking a cautious approach with all of our business partners in the
supply chain. The Company has also experienced increased sales in the passenger rail industry
over the last year which is expected to continue. Retail Fiscal 2005 showed strong growth in the Companys US retail sales program, particularly with the
club retailers, and it is beginning to allow the Company to capture the high volume benefits of US
retail without the marketing investment usually required in doing business with US retailers. The
Company is also beginning to gain brand awareness from its premium frozen foods sales. The Company
intends to continue to introduce new product offerings to retail in the remainder of fiscal 2005
and expects to see strong growth in this channel during the next fiscal year. The Company has been
eliminating some of its low margin private label items in France over the last three quarters and
will continue to monitor its retail marketing strategy in France. Military The US Military channel in particular the Navy, continues to be managed via a broker/distributor,
adding very little in terms of sales and administrative expense. The Company has been working for
over a year to place products into the Army Unitized Group Rations A (UGR-A) program. Two Cuisine
Solutions products were tested and selected for a 14 entrée rotating menu which began in October
2004. Cuisine Solutions will very likely place the same two products on the Army Concept of
Operations (CONOPS) menu for overseas military operations dining halls. There is no guarantee that
the Army will purchase the products from the Company, but the UGR-A menu began in second quarter of
fiscal year 2005 and, if the Army does so, it could lead to strong growth in this channel. The
Company will also attempt to place its products on other US military menus during the remainder of
fiscal year 2005. 23




---



##### 



National Restaurant Chains The Company will further pursue its role as a supplier to national restaurant chains in both the US
and France which consider the Companys product quality and ease of use an attractive alternative
for providing new and promotional menu items. The Company is also focusing on products that are
very difficult for a restaurant chain to prepare because of complexity or long cooking times. The
Company experienced significant sales growth in this channel in the US during fiscal year 2004, and
has added one additional sales person to this channel to help increase its growth in 2005.
Although the Companys products are of relatively high cost for many chains, management believes
there is a significant untapped market for our upscale, fully cooked products for the same reasons
such products are appealing to hotels and resorts. 24




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##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk The principal market risks (i.e. the risk of loss arising from adverse changes in market rates and
prices) to which we are exposed are interest rates, foreign exchange rates, sales and marketing. Interest rate exposure: The Companys exposure to market risk for changes in interest rates relates primarily to the
Companys investment and debt portfolio. The Company has not used derivative financial instruments
in its investment portfolio. The Company places its investments with high quality issuers. A
portion of the debt portfolio has fluctuating interest rates, which change with changes in the
market. Foreign Currency Risk: The majority of the Companys sales are denominated in U.S. dollars, thereby limiting the Companys
risk to changes in foreign currency rates. The French subsidiary reports its operations in Euros.
As currency exchange rates fluctuate, translation of the income statement for the French operations
into U.S. dollars affects year-over-year comparability of operating results. Sales, which are
subject to these foreign currency fluctuations, are currently 34.4% of the Companys sales. The
total assets of the subsidiaries are approximately 40.4% of the Companys total assets. The
Company does not enter into hedge transactions to minimize volatility of reported earnings because
it does not believe it is justified by the exposure or the cost. Sales and Marketing Risks: The Company is introducing and rolling-out new product lines into the Retail sector. Management
has put significant focus on the opportunities available in the retail sector and the success rate
will be contingent upon market acceptance of the product line, price points and execution of its
marketing strategy. Another risk includes fewer customers in the retail channel totaling larger
percentages of the overall Cuisine Solutions revenue. The company is also focusing on the US
military and National Restaurant Chains coupled with Retail as a hedge against further disruption
to the travel industry which may or may not be successful for the Company in the long term. The travel industry, and specifically the airlines, has been a major source of the Companys
revenue and formal business strategy. Management cannot forecast the continued stability of the
industry. The Company intends to position itself to provide maximum value to our airline and travel
related partners during these turbulent times. Although the Companys products have been selected for the Army UGR-A program, and will likely be
added to the CONOPS program, there is no guarantee that the Army will buy from the Company and
there is no volume guarantee or guarantee the products will stay on the menu. The potential
volumes would also decrease as the US military returns to a peacetime environment. Item 4. Controls and Procedures Our management evaluated, with the participation of our principal executive officer and our
principal financial officer, the effectiveness of the disclosure controls and procedures as of the
end of the period covered by this quarterly report. Based on that evaluation, the principal
executive officer and principal financial officer concluded that the Companys disclosure controls
and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, are
effective to ensure that information required to be disclosed in the reports that the Company files
or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported, within the time periods specified in the rules and forms of the Securities and Exchange
Commission. 25




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##### 



On March 7, 2005, the Companys audit committee received a letter from the Companys independent
registered public accounting firm, Grant Thornton LLP, that cited a weakness regarding the
Companys lack of appropriate resources dedicated to external financial reporting. While the
Company is not required under Section 404 of the Sarbanes-Oxley Act to issue managements report on
internal control over financial reporting until, at the earliest, the filing of its Form 10-K for
the fiscal year ending June 23, 2007, the Company is actively working toward establishing a system
of internal controls that it believes will be effective by this deadline. To that end, during the
period ending April 2, 2005, the Companys new controller with experience in external financial
reporting was engaged in the reporting process. The Company established an internal audit
committee, approved a new, more comprehensive audit committee charter, and on April 22, 2005, the
Company added an additional independent director to its audit committee. On April 6, 2005, the
Board approved the retention of outside accountants to consult with the company on complex external
reporting requirements. The Company believes that these improvements in internal control over
financial reporting will address the weakness cited by Grant Thornton LLP. Except for these
changes, there have been no changes in the Companys internal control over financial reporting that
occurred during the period covered by this report that have materially affected or are reasonably
likely to materially affect the Companys internal control over financial reporting. Our Management, including Chief Executive Officer and Chief Financial Officer, do not expect that
our disclosure controls and procedures will prevent all errors and fraud. In designing and
evaluating the disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only reasonable, not absolute,
assurance of achieving the desired control objectives. Further, the design of a control system
must reflect the fact that there are resource constraints, and management necessarily was required
to apply its judgment in evaluating the cost-benefit relationship of possible controls and
procedures. Because of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud, if any, within the
Company have been detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of
two or more people, or by managements override of the control. The design of any system of
controls also is based in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated goals under all
potential future conditions. Over time, controls may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may deteriorate. Because
of the inherent limitations in a cost-effective control system, misstatements due to error or fraud
may occur and not be detected. 26




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##### 



CUISINE SOLUTIONS, INC. PART II: OTHER INFORMATION Item 1. Legal Proceedings. At the end of fiscal year 2002, the Company filed a civil lawsuit in the Federal District Court of
Brasilia against the controlling partner in the joint venture, Cuisine Solutions do Brasil Ltda, as
a result of the Brazilian partners failure to disclose financial information and operating results
of Cuisine Solutions do Brasil Ltda to Cuisine Solutions Inc. according to both the joint venture
agreement and Brazilian law. The Company claims full recovery of the amounts owed by Cuisine
Solutions do Brasil Ltda, including a loan of $763,000, and management and administrative fees of
$895,000 according to the Joint Venture agreement with the Brazilian Partner. Such amounts have
been fully reserved for in prior years. The managing directors of Cuisine Solutions do Brasil
Ltda, Jose Sanchez Aguayo and Rodrigo Sanchez, were named as nominal defendants in the lawsuit. Due
to the current stage of the filed lawsuit, management cannot predict a judgment and the ultimate
outcome from this lawsuit. There are no other material pending legal proceedings, other than ordinary, routine litigation
incidental to the Companys business, to which the Company is a party or to which any of its
property is subject. Management does not believe that any amounts it may be required to pay by
reason thereof will have a material effect on the Companys financial position or results of
operations. Item 5. Other Events and Regulation FD Disclosure On April 22, 2005, Cuisine Solutions, Inc. appointed John D. Firestone and Robert N. Herman to its
Board of Directors. Mr. Firestone will also serve on the Boards compensation committee. Mr.
Firestone is currently a partner in the private equity company, Secor Group, and he serves on the
boards of Allied Capital, Security Storage, and Knowledge Delivery Systems. Mr. Firestone also
serves and has served on the boards and committees of civic organizations such as the Washington
National Cathedral, Washington Ballet, Corcoran Gallery of Art, and National Theater, National
Rehabilitation Hospital. Mr. Herman will also serve on the Boards audit committee. He is
currently a principal in the consulting firm The Herman Group, LLC. Previously, Mr. Herman was
Executive Vice President, COO, and General Counsel of Shoppers Food Warehouse Corp. He also spent
twelve years prior to that practicing law. Mr. Herman also serves on the Boards of Guest Services,
Inc., Fidelity and Trust Bank, and The Nora School. Item 6. Exhibits EXHIBIT INDEX ITEM       DESCRIPTION  3.1
    Restated Certificate of Incorporation, as amended (1).3.2
    Certificate of Amendment to Restated Certificate of Incorporation (2).3.3
    Bylaws (3).10.60
    Loan Agreement with Bank of Charles Town adopted March 15, 2005.10.61
    Amendment No. 2 to Loan Agreement with FIC dated April 20, 2005.31.1
    Certification of our CEO pursuant to Rule 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended. 27




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##### 



31.2
    Certification of our VP Finance pursuant to Rule 13a-15(e) and
 15d-15(e) of the Securities Exchange Act of 1934, as amended.32.1
    Certifications of our CEO and VP Finance pursuant to 18 U.S.C. §1350.   (1)
    
    Incorporated by reference to Exhibit 3-A of the Companys Form 10-K/A for the year ended June
27, 1992, filed with the Commission on April 2, 1993.(2)
    
    Incorporated by reference to Exhibit 3.2 for the Companys Form 8-A filed with the Commission
on February 22, 2005.(3)
    
    Incorporated by reference to Exhibit 3-B of the Companys Form 10-K/A for the year ended June
27, 1992, filed with the Commission on April 2, 1993. 28




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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized. CUISINE SOLUTIONS, INC.Date: May 17, 2005
    By:
    /s/Stanislas VilgrainStanislas VilgrainChief Executive OfficerBy:
    /s/Y. Tristan KuoY. Tristan Kuo


Vice President of Finance,

Treasurer and

Corporate Secretary 29




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EXHIBIT INDEX ITEM             DESCRIPTION
  3.1
    Restated Certificate of Incorporation, as amended (1).3.2
    Certificate of Amendment to Restated Certificate of Incorporation (2).3.3
    Bylaws (3).10.60
    Loan Agreement with Bank of Charles Town adopted March 15, 2005.10.61
    Amendment No. 2 to Loan Agreement with FIC dated April 20, 2005.31.1
    Certification of our CEO pursuant to Rule 13a-15(e) and 15d-15(e) of
 the Securities Exchange Act of 1934, as amended.31.2
    Certification of our VP Finance pursuant to Rule 13a-15(e) and
 15d-15(e) of the Securities Exchange Act of 1934, as amended.32.1
    Certifications of our CEO and VP Finance pursuant to 18 U.S.C. §1350.   (1)
    
    Incorporated by reference to Exhibit 3-A of the Companys Form 10-K/A for the year ended June
27, 1992, filed with the Commission on April 2, 1993.(2)
    
    Incorporated by reference to Exhibit 3.2 for the Companys Form 8-A filed with the Commission
on February 22, 2005.(3)
    
    Incorporated by reference to Exhibit 3-B of the Companys Form 10-K/A for the year ended June 27, 1992, filed
with the Commission on April 2, 1993. 30