##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period endedDecember 9, 2006
 OR
 o
    
    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 1-32439
 CUISINE SOLUTIONS, INC.
  DELAWARE
    
    52-0948383(State of other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification Number)
 85 S Bragg Street, Suite 600, Alexandria, VA 22312
  (703) 270-2900
  Yes þ No o
  o o þ
  Yes o No þ
   Class of Common Stock
    
    Number of SharesClass A 
Class B
    
    16,439,191
None




---



##### 



TABLE OF CONTENTS
 PART IItem 1.
    
    Financial Statements (unaudited)
    

    page   3Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    page 13Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    page 24Item 4.
    
    Controls and Procedures
    
    page 25PART IIItem 1.
    
    Legal Proceedings
    
    page 26Item 1A.
    
    Risk Factors
    
    page 26Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    page 26Item 3.
    
    Defaults Upon Senior Securities
    
    page 26Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    page 26Item 5.
    
    Other Information
    
    page 26Item 6.
    
    Exhibits
    
    page 26SIGNATURES
    
    
    
    page 28EX-10.65
    
    Summary of Chairman Compensation Arrangement
    
    page 29EX-31.1:
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
    
    page 30EX-31.2:
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
    
    page 31EX-32.1:
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    page 32
 2




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##### 



CUISINE SOLUTIONS, INC.
 PART I: FINANCIAL INFORMATION
 Item 1. Financial Statements (unaudited)
 CUISINE SOLUTIONS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
 December 9,
    
    
    June 24,2006
    
    
    2006ASSETSCurrent assetsCash and cash equivalents
    
    $
    3,067,000
    
    
    $
    2,154,000Trade accounts receivable, net
    
    
    7,710,000
    
    
    
    5,360,000Inventory, net
    
    
    10,190,000
    
    
    
    9,461,000Prepaid expenses
    
    
    685,000
    
    
    
    373,000Accounts receivable, related parties
    
    
    37,000
    
    
    
    25,000Other current assets
    
    
    465,000
    
    
    
    616,000Assets from discontinued operations
    
    
    10,000
    
    
    
    6,000TOTAL CURRENT ASSETS
    
    
    22,164,000
    
    
    
    17,995,000Investments, non-current
    
    
    375,000
    
    
    
    375,000Fixed assets, net
    
    
    10,246,000
    
    
    
    8,321,000Restricted cash
    
    
    35,000
    
    
    
    5,000Other assets
    
    
    56,000
    
    
    
    70,000TOTAL ASSETS
    
    $
    32,876,000
    
    
    $
    26,766,000LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesLine-of-credit
    
    $
    
    
    
    $
    1,000,000Current portion of long-term debt
    
    
    615,000
    
    
    
    356,000Accounts payable and accrued expenses
    
    
    9,701,000
    
    
    
    5,831,000Accrued payroll and related liabilities
    
    
    1,931,000
    
    
    
    2,455,000Liabilities from discontinued operations
    
    
    151,000
    
    
    
    150,000Total current liabilities
    
    
    12,398,000
    
    
    
    9,792,000Long-term debt, less current portion
    
    
    4,266,000
    
    
    
    3,321,000Asset retirement obligation
    
    
    398,000
    
    
    
    398,000TOTAL LIABILITIES
    
    
    17,062,000
    
    
    
    13,511,000Commitments and contingenciesStockholders equityCommon StockClass A Stock  $.01 par value, 20,000,000 shares authorized, 16,439,191 shares issued and
outstanding at December 9, 2006 and June 24, 2006
    
    
    165,000
    
    
    
    165,000Class B Stock  $.01 par value, 175,000 shares authorized, none issued
    
    
    
    
    
    
    Additional paid-in capital
    
    
    27,657,000
    
    
    
    27,516,000Accumulated deficit
    
    
    (12,974,000
    )
    
    
    (15,127,000
    )Accumulated Other Comprehensive Income:Cumulative translation adjustment
    
    
    966,000
    
    
    
    701,000TOTAL STOCKHOLDERS EQUITY
    
    
    15,814,000
    
    
    
    13,255,000TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    32,876,000
    
    
    $
    26,766,000


3



---



##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
 Twelve Weeks Ended
    
    
    Twenty Four Weeks EndedDecember 9,
    
    
    December 10,
    
    
    December 9,
    
    
    December 10,2006
    
    
    2005
    
    
    2006
    
    
    2005Net sales
    
    $
    23,248,000
    
    
    $
    16,595,000
    
    
    $
    37,454,000
    
    
    $
    31,347,000Cost of goods sold
    
    
    17,466,000
    
    
    
    12,414,000
    
    
    
    28,502,000
    
    
    
    23,080,000Gross margin
    
    
    5,782,000
    
    
    
    4,181,000
    
    
    
    8,952,000
    
    
    
    8,267,000Selling and administration
    
    
    4,042,000
    
    
    
    3,325,000
    
    
    
    6,554,000
    
    
    
    5,811,000Depreciation and amortization
    
    
    52,000
    
    
    
    38,000
    
    
    
    117,000
    
    
    
    79,000Other operating income
    
    
    (4,000
    )
    
    
    (17,000
    )
    
    
    (4,000
    )
    
    
    (17,000
    )Income from operations
    
    
    1,692,000
    
    
    
    835,000
    
    
    
    2,285,000
    
    
    
    2,394,000Non-operating income (expense)Investment income
    
    
    3,000
    
    
    
    15,000
    
    
    
    6,000
    
    
    
    40,000Interest expense
    
    
    (70,000
    )
    
    
    (35,000
    )
    
    
    (146,000
    )
    
    
    (71,000
    )Other income (expense), net
    
    
    8,000
    
    
    
    (20,000
    )
    
    
    19,000
    
    
    
    (46,000
    )Total non-operating expense
    
    
    (59,000
    )
    
    
    (40,000
    )
    
    
    (121,000
    )
    
    
    (77,000
    )Income before income tax
    
    
    1,633,000
    
    
    
    795,000
    
    
    
    2,164,000
    
    
    
    2,317,000Provision for income tax expense
    
    
    (5,000
    )
    
    
    (8,000
    )
    
    
    (11,000
    )
    
    
    (8,000
    )NET INCOME
    
    $
    1,628,000
    
    
    $
    787,000
    
    
    $
    2,153,000
    
    
    $
    2,309,000Basic and diluted net income per common share:Net income per common share-basic
    
    $
    0.10
    
    
    $
    0.05
    
    
    $
    0.13
    
    
    $
    0.14Net income per common share-diluted
    
    $
    0.09
    
    
    $
    0.04
    
    
    $
    0.12
    
    
    $
    0.13Weighted average shares outstanding-basic
    
    
    16,439,191
    
    
    
    16,178,771
    
    
    
    16,439,191
    
    
    
    16,129,473Common stock equivalents
    
    
    1,664,453
    
    
    
    1,878,046
    
    
    
    1,647,271
    
    
    
    1,871,230Weighted average shares outstanding-diluted
    
    
    18,103,644
    
    
    
    18,056,817
    
    
    
    18,086,462
    
    
    
    18,000,703
  4




---



##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
(Unaudited)
 UnrealizedRetained
    
    
    Gains/(Losses)Additional
    
    
    Earnings
    
    
    on Debt
    
    
    Cumulative
    
    
    TotalCommon
    
    
    Paid-In
    
    
    (Accumulated
    
    
    and Equity
    
    
    Translation
    
    
    StockholdersStock
    
    
    Capital
    
    
    Deficit)
    
    
    Investments
    
    
    Adjustment
    
    
    EquityBalance, June 24, 2006
    
    $
    165,000
    
    
    $
    27,516,000
    
    
    $
    (15,127,000
    )
    
    $
    --
    
    
    $
    701,000
    
    
    $
    13,255,000Exercise of common stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation
    
    
    
    
    
    
    141,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    141,000Twenty four weeks 2007 net
income
    
    
    
    
    
    
    
    
    
    
    2,153,000
    
    
    
    
    
    
    
    
    
    
    
    2,153,000Other Comprehensive IncomeUnrealized loss on debt
and equity investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    265,000
    
    
    
    265,000Other Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    265,000Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,418,000Balance, December 9, 2006
    
    $
    165,000
    
    
    $
    27,657,000
    
    
    $
    (12,974,000
    )
    
    $
    
    
    
    $
    966,000
    
    
    $
    15,814,000
 UnrealizedRetained
    
    
    Gains/(Losses)Additional
    
    
    Earnings
    
    
    on Debt
    
    
    Cumulative
    
    
    TotalCommon
    
    
    Paid-In
    
    
    (Accumulated
    
    
    and Equity
    
    
    Translation
    
    
    StockholdersStock
    
    
    Capital
    
    
    Deficit)
    
    
    Investments
    
    
    Adjustment
    
    
    EquityBalance, June 25, 2005
    
    $
    161,000
    
    
    $
    26,754,000
    
    
    $
    (18,781,000
    )
    
    $
    (7,000
    )
    
    $
    524,000
    
    
    $
    8,651,000Exercise of common stock options
    
    
    1,000
    
    
    
    136,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    137,000Stock-based compensation
    
    
    
    
    
    
    178,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    178,000Twenty four weeks 2006 net
income
    
    
    
    
    
    
    
    
    
    
    2,309,000
    
    
    
    
    
    
    
    
    
    
    
    2,309,000Other Comprehensive IncomeUnrealized loss on debt
and equity investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,000
    )
    
    
    
    
    
    
    (21,000
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (125,000
    )
    
    
    (125,000
    )Other Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (146,000
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,163,000Balance, December 10, 2005
    
    $
    162,000
    
    
    $
    27,068,000
    
    
    $
    (16,472,000
    )
    
    $
    (28,000
    )
    
    $
    399,000
    
    
    $
    11,129,000
  5




---



##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 Year to dateTwenty Four weeks endedDecember 9,
    
    
    December 10,2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    2,153,000
    
    
    $
    2,309,000Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation and amortization
    
    
    608,000
    
    
    
    401,000Allowance for doubtful accounts
    
    
    (66,000
    )
    
    
    128,000Inventory obsolescence reserve
    
    
    (114,000
    )
    
    
    147,000Loss on investments
    
    
    
    
    
    
    5,000Stock-based compensation
    
    
    141,000
    
    
    
    178,000Changes in assets and liabilities, net of effects of non-cash transactions:Increase in accounts receivable
    
    
    (2,284,000
    )
    
    
    (2,122,000
    )Increase in inventory
    
    
    (615,000
    )
    
    
    (200,000
    )Increase in prepaid expenses
    
    
    (312,000
    )
    
    
    (40,000
    )(Increase) decrease in accounts receivable, related parties
    
    
    (12,000
    )
    
    
    68,000Decrease in other assets
    
    
    165,000
    
    
    
    148,000Increase in accounts payable and accrued expenses
    
    
    3,870,000
    
    
    
    1,563,000(Decrease) increase in accrued payroll and related liabilities
    
    
    (524,000
    )
    
    
    177,000Changes in assets and liabilities of discontinued operations
    
    
    (3,000
    )
    
    
    20,000Net cash provided by operating activities
    
    
    3,007,000
    
    
    
    2,782,000CASH FLOWS FROM INVESTING ACTIVITIESProceeds from investments
    
    
    
    
    
    
    139,000Increase in restricted cash
    
    
    (30,000
    )
    
    
    Capital expenditures
    
    
    (2,533,000
    )
    
    
    (1,412,000
    )Net cash used in investing activities
    
    
    (2,563,000
    )
    
    
    (1,273,000
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments on debt
    
    
    (119,000
    )
    
    
    (850,000
    )Proceeds from debt
    
    
    1,323,000
    
    
    
    1,004,000Net repayment on line-of-credit
    
    
    (1,000,000
    )
    
    
    (343,000
    )Payments on debts from discontinued operations
    
    
    
    
    
    
    (1,031,000
    )Proceeds from stock issuance
    
    
    
    
    
    
    137,000Net cash provided by (used in) financing activities
    
    
    204,000
    
    
    
    (1,083,000
    )Net increase in cash and cash equivalents
    
    
    648,000
    
    
    
    426,000Change in cumulative translation adjustment
    
    
    265,000
    
    
    
    (125,000
    )Cash and cash equivalents, beginning of period
    
    
    2,154,000
    
    
    
    2,171,000CASH and CASH EQUIVALENTS, END OF PERIOD
    
    $
    3,067,000
    
    
    $
    2,472,000SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATIONCash paid during the period for interest
    
    $
    67,000
    
    
    $
    79,000Cash paid during the period for income taxes
    
    $
    1,000
    
    
    $
    
  6




---



##### 



Cuisine Solutions, Inc.
   NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    Nature of Operations
  Principles of Consolidation
   Revenue Recognition
  Customer Dependency
  7




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##### 



Impairment of Long-Lived Assets and Long-Lived Assets To Be Disposed Of
  Foreign Currency Translation
  NOTE 2  FISCAL PERIODS
  NOTE 3  ACCOUNTS RECEIVABLE
  December 9, 2006
    
    
    June 24, 2006Trade accounts receivable
    
    $
    8,290,000
    
    
    $
    6,022,000Allowance for doubtful accounts
    
    
    (580,000
    )
    
    
    (662,000
    )Trade accounts receivable, net
    
    $
    7,710,000
    
    
    $
    5,360,000
  NOTE 4  INVENTORY
    December 9, 2006
    
    
    June 24, 2006Raw materials
    
    $
    4,410,000
    
    
    $
    3,371,000Frozen product & other finished goods
    
    
    5,216,000
    
    
    
    5,297,000Packing materials & supplies
    
    
    994,000
    
    
    
    1,074,00010,620,000
    
    
    
    9,742,000Less obsolescence reserve
    
    
    (430,000
    )
    
    
    (281,000
    )$
    10,190,000
    
    
    $
    9,461,000
 8




---



##### 



NOTE 5  COMMITMENTS AND CONTINGENCIES
   NOTE 6  TRANSACTIONS WITH RELATED PARTIES
   NOTE 7  DISCONTINUED OPERATIONS
   December 9, 2006
    
    
    June 24, 2006Assets of discontinued operations:Cash
    
    $
    9,000
    
    
    $
    Other assets
    
    
    1,000
    
    
    
    6,000Total assets of discontinued operations
    
    $
    10,000
    
    
    $
    6,000Liabilities of discontinued operations:Accounts payable and accrued liabilities
    
    $
    151,000
    
    
    $
    150,000Total liabilities of discontinued operations
    
    $
    151,000
    
    
    $
    150,000
 NOTE 8  EARNINGS PER SHARE
  9




---



##### 



NOTE 9  ACCOUNTING FOR STOCK-BASED COMPENSATION
    Twenty fourweeks ended
    
    Twenty fourTwelve weeks ended
    
    Twelve weeks ended
    
    December 9,
    
    weeks endedDecember 9, 2006
    
    December 10, 2005
    
    2006
    
    December 10, 2005Expected dividend
yield
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Risk-free interest
rate
    
    
    5.1
    %
    
    
    3.7
    %
    
    
    5.1
    %
    
    
    3.7
    %Expected life (in
years)
    
    
    5
    
    
    
    5
    
    
    
    5
    
    
    
    5Expected volatility
    
    
    95
    %
    
    
    209
    %
    
    
    95
    %
    
    
    209
    %
   Twelve weeks ended
    
    
    Twelve weeks endedDecember 9, 2006
    
    
    December 10, 2005Weighted- Average
    
    
    
    
    
    
    Weighted- AverageOptions
    
    Shares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise PriceOutstanding at beginning of the period
    
    
    2,460,500
    
    
    $
    0.99
    
    
    
    2,791,726
    
    
    $
    1.01Granted
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Exercised
    
    
    
    
    
    $
    
    
    
    
    (144,250
    )
    
    $
    0.87Forfeited or expired
    
    
    (200,000
    )
    
    $
    1.38
    
    
    
    
    
    
    $
    Outstanding at end of the period
    
    
    2,260,500
    
    
    $
    0.95
    
    
    
    2,647,476
    
    
    $
    1.02Exercisable at end of the period
    
    
    2,211,750
    
    
    $
    0.95
    
    
    
    2,169,676
    
    
    $
    1.03
  Twenty four weeks ended
    
    
    Twenty four weeks endedDecember 9, 2006
    
    
    December 10, 2005Weighted- Average
    
    
    
    
    
    
    Weighted- AverageOptions
    
    Shares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise PriceOutstanding at beginning of the period
    
    
    2,448,099
    
    
    $
    0.99
    
    
    
    2,795,968
    
    
    $
    1.02Granted
    
    
    12,401
    
    
    $
    0.01
    
    
    
    10,758
    
    
    $
    0.01Exercised
    
    
    
    
    
    $
    
    
    
    
    (159,250
    )
    
    $
    0.88Forfeited or expired
    
    
    (200,000
    )
    
    $
    1.38
    
    
    
    
    
    
    $
    Outstanding at end of the period
    
    
    2,260,500
    
    
    $
    0.95
    
    
    
    2,647,476
    
    
    $
    1.02Exercisable at end of the period
    
    
    2,011,750
    
    
    $
    0.95
    
    
    
    2,169,676
    
    
    $
    1.03
 10




---



##### 



Stock Options OutstandingNumber
    
    Weighted-Average
    
    
    
    
    
    AggregateOutstanding
    
    Remaining
    
    Weighted-Avg
    
    IntrinsicRange of Exercise Prices
    
    12/9/2006
    
    Contractual Life
    
    Exercise Price
    
    Value$0.01 to $0.24
    
    
    173,903
    
    
    
    7.68
    
    
    $
    0.01
    
    
    $
    443,789$0.25 to $0.6561
    
    
    85,250
    
    
    
    5.87
    
    
    $
    0.25
    
    
    $
    $0.6562 to $1.030
    
    
    1,224,000
    
    
    
    6.14
    
    
    $
    0.88
    
    
    $
    19,050$1.031 to $1.37
    
    
    518,997
    
    
    
    3.69
    
    
    $
    1.14
    
    
    $
    $1.38 to $1.50
    
    
    138,350
    
    
    
    1.79
    
    
    $
    1.39
    
    
    $
    $1.51 to $2.00
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    $2.01 to $2.50
    
    
    120,000
    
    
    
    7.88
    
    
    $
    2.10
    
    
    $
    2,260,500
    
    
    
    5.51
    
    
    $
    0.95
    
    
    $
    462,839
 Stock Options ExercisableNumber
    
    
    Weighted-Average
    
    
    
    
    
    
    AggregateExercisable
    
    
    Remaining
    
    
    Weighted-Avg
    
    
    IntrinsicRange of Exercise Prices
    
    at 12/9/2006
    
    
    Contractual Life
    
    
    Exercise Price
    
    
    Value$0.01 to $0.24
    
    
    173,903
    
    
    
    7.68
    
    
    $
    0.01
    
    
    $
    443,789$0.25 to $0.6561
    
    
    85,250
    
    
    
    5.87
    
    
    $
    0.25
    
    
    $
    $0.6562 to $1.030
    
    
    992,750
    
    
    
    5.93
    
    
    $
    0.88
    
    
    $
    14,288$1.031 to $1.37
    
    
    506,497
    
    
    
    3.60
    
    
    $
    1.14
    
    
    $
    $1.38 to $1.50
    
    
    138,350
    
    
    
    1.79
    
    
    $
    1.39
    
    
    $
    $1.51 to $2.00
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    $2.01 to $2.50
    
    
    115,000
    
    
    
    7.88
    
    
    $
    2.10
    
    
    $
    2,011,750
    
    
    
    5.20
    
    
    $
    0.95
    
    
    $
    458,077
   NOTE 10  RECENT ACCOUNTING PRONOUNCEMENTS
   11




---



##### 



NOTE 11  RECLASSIFICATIONS
  12




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
  The following analysis of our financial condition and results of operations should be read in
conjunction with our financial statements and the notes thereto contained elsewhere in this report.
 BUSINESS OVERVIEW
   
    
    On Board Services: Airlines, railroad and cruise lines;
    
    Foodservice: Hotel banquets, convention centers, sport stadiums and other special events such as the Olympics;
    
    Retail: Supermarket in-store deli, premium packaged foods;
    
    Military: Naval carriers, Army field feeding, and military dining halls and clubs; and
    
    National Restaurant Chains: Upscale multi-unit restaurants.
 CRITICAL ACCOUNTING ESTIMATES AND POLICIES
    13




---



##### 



RECENT ACCOUNTING PRONOUNCEMENTS
     RESULTS OF OPERATIONS
 Comparison of the twelve weeks ended December 9, 2006 to the twelve weeks ended December 10, 2005
   14




---



##### 



Net Sales
  Q2 Fiscal 2007
    
    
    Q2 Fiscal 2006
    
    
    $ Change
    
    
    %ChangeU.S.
    
    $
    16,713,000
    
    
    $
    11,567,000
    
    
    $
    5,146,000
    
    
    
    44.5
    %France
    
    
    6,535,000
    
    
    
    5,028,000
    
    
    
    1,507,000
    
    
    
    30.0
    %Total Net Sales
    
    $
    23,248,000
    
    
    $
    16,595,000
    
    
    $
    6,653,000
    
    
    
    40.1
    %
    Q2 Fiscal 2007
    
    
    Q2 Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    3,681,000
    
    
    $
    3,616,000
    
    
    
    65,000
    
    
    
    1.8
    %On Board Services
    
    
    4,634,000
    
    
    
    3,819,000
    
    
    
    815,000
    
    
    
    21.3
    %Retail
    
    
    9,434,000
    
    
    
    5,679,000
    
    
    
    3,755,000
    
    
    
    66.1
    %Military
    
    
    4,666,000
    
    
    
    2,647,000
    
    
    
    2,019,000
    
    
    
    76.3
    %National Restaurant Chain
    
    
    833,000
    
    
    
    834,000
    
    
    
    (1,000
    )
    
    
    (0.1
    %)Total
    
    $
    23,248,000
    
    
    $
    16,595,000
    
    
    $
    6,653,000
    
    
    
    40.1
    %
  U.S. Sales
  Q2 Fiscal 2007
    
    
    Q2 Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    2,210,000
    
    
    $
    2,296,000
    
    
    $
    (86,000
    )
    
    
    (3.7
    %)On Board Services
    
    
    2,277,000
    
    
    
    1,893,000
    
    
    
    384,000
    
    
    
    20.3
    %Retail
    
    
    6,727,000
    
    
    
    3,897,000
    
    
    
    2,830,000
    
    
    
    72.6
    %Military
    
    
    4,666,000
    
    
    
    2,647,000
    
    
    
    2,019,000
    
    
    
    76.3
    %National Restaurant Chain
    
    
    833,000
    
    
    
    834,000
    
    
    
    (1,000
    )
    
    
    (0.1
    %)Total
    
    $
    16,713,000
    
    
    $
    11,567,000
    
    
    $
    5,146,000
    
    
    
    44.5
    %
     15




---



##### 



France Sales
  Q2 Fiscal 2007
    
    Q2 Fiscal 2006
    
    $ Change
    
    %ChangeSales in U.S. dollars
    
    $
    6,535,000
    
    
    $
    5,028,000
    
    
    $
    1,507,000
    
    
    
    30.0
    %Sales in Euros
    
    
    5,114,000
    
    
    
    4,209,000
    
    
    
    905,000
    
    
    
    21.5
    %Average exchange rate
    
    
    0.7825
    
    
    
    0.8371
   Q2 Fiscal 2007
    
    
    Q2 Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    1,471,000
    
    
    $
    1,320,000
    
    
    $
    151,000
    
    
    
    11.4
    %On Board Services
    
    
    2,357,000
    
    
    
    1,926,000
    
    
    
    431,000
    
    
    
    22.4
    %Retail
    
    
    2,707,000
    
    
    
    1,782,000
    
    
    
    925,000
    
    
    
    51.9
    %Total
    
    $
    6,535,000
    
    
    $
    5,028,000
    
    
    $
    1,507,000
    
    
    
    30.0
    %
    Gross Margin
  Twelve weeks endedDecember 9,
    
    December 10,2006
    
    2005
    
    % Change(Dollars in thousands)Net sales
    
    $
    23,248
    
    
    $
    16,595
    
    
    
    40.1
    %Gross margin
    
    $
    5,782
    
    
    $
    4,181
    
    
    
    38.3
    %Gross margin percentage
    
    
    24.9
    %
    
    
    25.2
    %
  16




---



##### 



Selling and Administrative Expenses
  Q2 Fiscal 2007
    
    
    Q2 Fiscal 2006
    
    
    $ Change
    
    
    %ChangeU.S.
    
    $
    3,135,000
    
    
    $
    2,511,000
    
    
    $
    624,000
    
    
    
    24.9
    %France
    
    
    907,000
    
    
    
    814,000
    
    
    
    93,000
    
    
    
    11.4
    %Total Selling and Administrative Expenses
    
    $
    4,042,000
    
    
    $
    3,325,000
    
    
    $
    717,000
    
    
    
    21.6
    %
  Depreciation and Amortization
  Non-operating Income and Expense
  Provision for Taxes
  17




---



##### 



Comparison of the twenty four weeks ended December 9, 2006 to the twenty four weeks ended December
10, 2005
   Net Sales
  YTD Fiscal 2007
    
    
    YTD Fiscal 2006
    
    
    $ Change
    
    
    %ChangeU.S.
    
    $
    26,610,000
    
    
    $
    22,159,000
    
    
    $
    4,451,000
    
    
    
    20.1
    %France
    
    
    10,844,000
    
    
    
    9,188,000
    
    
    
    1,656,000
    
    
    
    18.0
    %Total Net Sales
    
    $
    37,454,000
    
    
    $
    31,347,000
    
    
    $
    6,107,000
    
    
    
    19.5
    %
    YTD Fiscal 2007
    
    
    YTD Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    6,093,000
    
    
    $
    5,758,000
    
    
    $
    335,000
    
    
    
    5.8
    %On Board Services
    
    
    8,762,000
    
    
    
    8,422,000
    
    
    
    340,000
    
    
    
    4.0
    %Retail
    
    
    12,495,000
    
    
    
    7,466,000
    
    
    
    5,029,000
    
    
    
    67.4
    %Military
    
    
    8,499,000
    
    
    
    8,365,000
    
    
    
    134,000
    
    
    
    1.6
    %National Restaurant Chain
    
    
    1,605,000
    
    
    
    1,336,000
    
    
    
    269,000
    
    
    
    20.1
    %Total
    
    $
    37,454,000
    
    
    $
    31,347,000
    
    
    $
    6,107,000
    
    
    
    19.5
    %
  U.S. Sales
  YTD Fiscal 2007
    
    
    YTD Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    3,669,000
    
    
    $
    3,507,000
    
    
    $
    162,000
    
    
    
    4.6
    %On Board Services
    
    
    4,403,000
    
    
    
    4,216,000
    
    
    
    187,000
    
    
    
    4.4
    %Retail
    
    
    8,434,000
    
    
    
    4,735,000
    
    
    
    3,699,000
    
    
    
    78.1
    %Military
    
    
    8,499,000
    
    
    
    8,365,000
    
    
    
    134,000
    
    
    
    1.6
    %National Restaurant Chain
    
    
    1,605,000
    
    
    
    1,336,000
    
    
    
    269,000
    
    
    
    20.1
    %Total
    
    $
    26,610,000
    
    
    $
    22,159,000
    
    
    $
    4,451,000
    
    
    
    20.1
    %
  18




---



##### 



France Sales
  YTD Fiscal 2007
    
    YTD Fiscal 2006
    
    $ Change
    
    %ChangeSales in U.S. dollars
    
    $
    10,844,000
    
    
    $
    9,188,000
    
    
    $
    1,656,000
    
    
    
    18.0
    %Sales in Euros
    
    
    8,497,000
    
    
    
    7,617,000
    
    
    
    880,000
    
    
    
    11.6
    %Average exchange rate
    
    
    0.784
    
    
    
    0.829
   YTD Fiscal 2007
    
    
    YTD Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    2,424,000
    
    
    $
    2,251,000
    
    
    $
    173,000
    
    
    
    7.7
    %On Board Services
    
    
    4,359,000
    
    
    
    4,206,000
    
    
    
    153,000
    
    
    
    3.6
    %Retail
    
    
    4,061,000
    
    
    
    2,731,000
    
    
    
    1,330,000
    
    
    
    48.7
    %Total
    
    $
    10,844,000
    
    
    $
    9,188,000
    
    
    $
    1,656,000
    
    
    
    18.0
    %
    19




---



##### 



Gross Margin
  Twenty four weeks endedDecember 9,
    
    December 10,2006
    
    2005
    
    % Change(Dollars in thousands)Net sales
    
    $
    37,454
    
    
    $
    31,347
    
    
    
    19.5
    %Gross margin
    
    $
    8,952
    
    
    $
    8,267
    
    
    
    8.3
    %Gross margin percentage
    
    
    23.9
    %
    
    
    26.4
    %
    Selling and Administrative Expenses
  YTD Fiscal 2007
    
    
    YTD Fiscal 2006
    
    
    $ Change
    
    
    %ChangeU.S.
    
    $
    5,025,000
    
    
    $
    4,279,000
    
    
    $
    746,000
    
    
    
    17.4
    %France
    
    
    1,529,000
    
    
    
    1,532,000
    
    
    
    (3,000
    )
    
    
    (0.2
    %)Total Selling and Administrative Expenses
    
    $
    6,554,000
    
    
    $
    5,811,000
    
    
    $
    743,000
    
    
    
    12.8
    %
  Depreciation and Amortization
  Non-operating Income and Expense
  20




---



##### 



Provision for Taxes
  Liquidity and Capital Resources
          21




---



##### 



FUTURE PROSPECTS
  Food Service
  On Board Services
  Retail
  22




---



##### 



Military
  National Restaurant Chains
  23




---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Exposure
  Foreign Currency Risk
  24




---



##### 



Item 4. Controls and Procedures
    25




---



##### 



CUISINE SOLUTIONS, INC.
 PART II: OTHER INFORMATION
 Item 1. Legal Proceedings.
  Item 1A. Risk Factors.
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Item 3. Defaults Upon Senior Securities
  Item 4. Submission of Matters to a Vote of Security Holders
  1.
    
    The election of the following directors to serve until the Companys 2007 Annual Meeting of
Stockholders:
 Nominee
    
    Shares voted for
    
    Authority withheldJean-Louis Vilgrain
    
    
    15,092,452
    
    
    
    622,323Stanislas Vilgrain
    
    
    15,378,752
    
    
    
    336,023Charles C. McGettigan
    
    
    15,559,895
    
    
    
    154,880Sebastien Vilgrain
    
    
    15,092,152
    
    
    
    622,623Robert van Roijen
    
    
    15,635,595
    
    
    
    79,180Hugues Prince
    
    
    15,456,552
    
    
    
    258,223John D. Firestone
    
    
    15,640,795
    
    
    
    73,980Robert H. Herman
    
    
    15,640,595
    
    
    
    74,180Thomas L. Gregg
    
    
    15,425,652
    
    
    
    289,123
 2.
    
    The ratification of the selection of BDO Seidman LLP as the Companys independent registered
public accounting firm for the fiscal year ending June 30, 2007:
 Shares voted for
    
    Shares voted against
    
    Shares abstained15,712,630
    
    
    1,435
    
    
    
    710
 Item 5. Other Information
  Item 6. Exhibits
 EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    Restated Certificate of Incorporation, as amended. (1)3.2
    
    Certificate of Amendment of Restated Certificate of Incorporation. (2)
 26




---



##### 



ExhibitNumber
    
    Description3.3
    
    By-laws. (3)10.64
    
    Credit Agreement with Bank of Charles Town, as amended, dated November 1, 2006. (4)10.65
    
    Summary of Chairman Compensation Arrangement31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 (1)
    
    Incorporated by reference to exhibit 3-A of the Registrant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 of the Registrants Registration Statement
on Form 8-A, filed with the Commission on February 22, 2005.(3)
    
    Incorporated by reference to exhibit 3-B of the Registrants Form 10-K/A for the year
ended June 27, 1992, filed with the Commission on April 2, 1993.(4)
    
    Incorporated by reference to exhibit 10.64 of the Registrants Form 8-K filed with
the SEC on November 6, 2006. 27




---



##### 



SIGNATURES
  CUISINE SOLUTIONS, INC.Date:    January 23, 2007
    By:

/s/ Stanislas VilgrainStanislas VilgrainChief Executive Officer By:

/s/ Yuyun Tristan KuoYuyun Tristan KuoChief Financial Officer, Treasurer and
Corporate Secretary 28