##### 



Form 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



|           |      |  |                                                                                          
|---------- | ---- |  | -----------------------------------------------------------------------------------------
|(Mark One) |     
|           | (X)  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 
|          
|           |      |  | For the quarterly period ended September 20, 2003                                        
|          
|OR        
|          
|           | (  ) |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|          
|           |      |  | For the transition period from
________ to ________                                      

Commission File Number 0-12800

CUISINE SOLUTIONS, INC.

Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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 X       No

Indicate the number of shares outstanding of each of the issuers classes of
common stock as of October 24, 2003.

|                            |  |                 
|--------------------------- |  | ----------------
|Common Stock 0.01 par value |  | Number of Shares
|                            |  |                 
|Class A
Class B             |  | 15,824,788
None 





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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 Securities and
Exchange Commission. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles 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

|                                       |                                                                                                                                                             |                            |             |               |            |          |             |            |            | 
|-------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ----------- | ------------- | ---------- | -------- | ----------- | ---------- | ---------- | 
|                                       |                                                                                                                                                             |                            |             |              
|                                       |                                                                                                                                                             |                            |             | September 20, |            | June 28,
|                                       |                                                                                                                                                             |                            |             | 2003          |            | 2003    
|                                       |                                                                                                                                                             |                            |             |               |            |         
|ASSETS                                 |                                                                                                                                                             | (Unaudited)                |             |               |            |         
|Current Assets                         |                                                                                                                                                             |                            |             |               |            |          |             |           
|                                       |                                                                                                                                                             | Cash and cash equivalents  |             | $             | 615,000    |          |             | $          | 1,357,000  | 
|                                       |                                                                                                                                                             | Accounts receivable, trade |             |               | 3,618,000  |          |             |            | 3,479,000  | 
|                                       | Inventory                                                                                                                                                   |                            |             | 4,208,000     |            |          |             | 4,056,000  |           
|                                       | Prepaid expenses                                                                                                                                            |                            |             | 303,000       |            |          |             | 450,000    |           
|Notes receivable, related party        |                                                                                                                                                             |                            | 26,000      |               |            |          | 32,000      |           
|                                       | Other current assets                                                                                                                                        |                            |             | 409,000       |            |          |             | 450,000    |           
|                                       |                                                                                                                                                             |                            |             |               |            |          |             |           
|                                       |                                                                                                                                                             | TOTAL CURRENT ASSETS       |             |               | 9,179,000  |          |             |            | 9,824,000  | 
|Investments                            |                                                                                                                                                             |                            | 1,320,000   |               |            |          | 1,331,000   |           
|Fixed assets, net                      |                                                                                                                                                             |                            | 5,095,000   |               |            |          | 5,264,000   |           
|Other assets                           |                                                                                                                                                             |                            | 9,000       |               |            |          | 9,000       |           
|                                       |                                                                                                                                                             |                            |             |               |            |          |             |           
|                                       |                                                                                                                                                             | TOTAL ASSETS               |             | $             | 15,603,000 |          |             | $          | 16,428,000 | 
|                                       |                                                                                                                                                             |                            |             |               |            |          |             |           
|LIABILITIES AND STOCKHOLDERS EQUITY   |                                                                                                                                                             |                            |             |               |            |          |             |           
|Current liabilities                    |                                                                                                                                                             |                            |             |               |            |          |             |           
|                                       | Current portion of long-term debt                                                                                                                           |                            |             | 1,563,000     |            |          |             | 1,970,000  |           
|                                       | Accounts payable and accrued expenses                                                                                                                       |                            |             | 4,001,000     |            |          |             | 3,950,000  |           
|                                       | Accrued payroll and related liabilities                                                                                                                     |                            |             | 1,158,000     |            |          |             | 1,351,000  |           
|                                       |                                                                                                                                                             |                            |             |               |            |          |             |           
|                                       |                                                                                                                                                             | Total current liabilities  |             |               | 6,722,000  |          |             |            | 7,271,000  | 
|Long-term debt, less current portion   |                                                                                                                                                             |                            | 1,654,000   |               |            |          | 1,691,000   |           
|                                       |                                                                                                                                                             |                            |             |               |            |          |             |           
|                                       |                                                                                                                                                             | TOTAL LIABILITIES          |             |               | 8,376,000  |          |             |            | 8,962,000  | 
|                                       |                                                                                                                                                             |                            |             |               |            |          |             |           
|Stockholders equity                   |                                                                                                                                                             |                            |             |               |            |          |             |           
|                                       | Common stock  $.01 par value, 20,000,000 shares authorized,
15,824,788 shares issued and outstanding
at September 20, 2003 and June 28, 2003, respectively |                            |             | 159,000       |            |          |             | 159,000    |           
|                                       | Class B Stock  $.01 par value, 175,000 shares authorized,
none issued                                                                                      |                            |             |              |            |          |             |           |           
|                                       | Additional paid-in capital                                                                                                                                  |                            |             | 26,284,000    |            |          |             | 26,284,000 |           
|Accumulated deficit                    |                                                                                                                                                             |                            | (19,667,000 | )             |            |          | (19,486,000 | )         
|Accumulated Other Comprehensive Income |                                                                                                                                                             |                            |             |               |            |          |             |           
|                                       | Unrealized gain on debt and equity investments                                                                                                              |                            |             | 48,000        |            |          |             | 59,000     |           
|                                       | Cumulative translation adjustment                                                                                                                           |                            |             | 403,000       |            |          |             | 450,000    |           
|                                       |                                                                                                                                                             |                            |             |               |            |          |             |           
|                                       |                                                                                                                                                             | TOTAL STOCKHOLDERS EQUITY |             |               | 7,227,000  |          |             |            | 7,466,000  | 
|                                       |                                                                                                                                                             |                            |             |               |            |          |             |           
|                                       | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                  |                            | $           | 15,603,000    |            |          | $           | 16,428,000 |           
|                                       |                                                                                                                                                             |                            |             |               |            |          |             |           

See accompanying notes to consolidated financial statements.

F-3





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##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

|                                           |                           |                             |            |                    |         |         |            |           |         |  
|------------------------------------------ | ------------------------- | --------------------------- | ---------- | ------------------ | ------- | ------- | ---------- | --------- | ------- | -
|                                           |                           |                             |            |                   
|                                           |                           |                             |            | First Quarter     
|                                           |                           |                             |            |                   
|                                           |                           |                             |            | Twelve Weeks Ended
|                                           |                           |                             |            |                   
|                                           |                           |                             |            | Sep 20,            |         | Sep 21,
|                                           |                           |                             |            | 2003               |         | 2002   
|                                           |                           |                             |            |                    |         |        
|NET SALES                                  |                           | $                           | 7,102,000  |                    |         | $       | 6,423,000  |          
|Cost of goods sold                         |                           |                             | 5,905,000  |                    |         |         | 5,327,000  |          
|                                           |                           |                             |            |                    |         |         |            |          
|                                           | GROSS MARGIN              |                             |            | 1,197,000          |         |         |            | 1,096,000 |        
|                                          
|Selling and administration                 |                           |                             | 1,242,000  |                    |         |         | 1,715,000  |          
|Depreciation and amortization              |                           |                             | 114,000    |                    |         |         | 131,000    |          
|                                           |                           |                             |            |                    |         |         |            |          
|                                           | LOSS FROM OPERATIONS      |                             |            | (159,000           | )       |         |            | (750,000  | )      
|                                           |                           |                             |            |                    |         |         |            |          
|                                          
|Nonoperating income (expense)              |                           |                             |            |                    |         |         |            |          
|                                           | Investment income         |                             |            | 17,000             |         |         |            | 35,000    |        
|                                           | Interest expense          |                             |            | (31,000            | )       |         |            | (48,000   | )      
|                                           | Other expense             |                             |            | (8,000             | )       |         |            | (11,000   | )      
|                                           |                           |                             |            |                    |         |         |            |          
|                                           |                           | TOTAL NON-OPERATING EXPENSE |            |                    | (22,000 | )       |            |           | (24,000 | )
|                                           |                           |                             |            |                    |         |         |            |          
|                                          
|Loss from operations before income tax     |                           |                             | (181,000   | )                  |         |         | (774,000   | )        
|Provision for income tax benefit (expense) |                           |                             |           |                    |         |         |           |          
|                                           |                           |                             |            |                    |         |         |            |          
|                                          
|NET LOSS                                   |                           |                             | (181,000   | )                  |         |         | (774,000   | )        
|                                           |                           |                             |            |                    |         |         |            |          
|                                          
|Basic and diluted net loss per share:      |                           |                             |            |                    |         |         |            |          
|                                           | Net loss per common share |                             |            | ($0.01             | )       |         |            | ($0.05    | )      
|Weighted average shares outstanding        |                           |                             | 15,824,788 |                    |         |         | 15,824,588 |          
|                                           |                           |                             |            |                    |         |         |            |          

See accompanying notes to consolidated financial statements.

F-4





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##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                         |                                       |                                                |                                                              |          |                    |          |          |            |            |          |  
|---------------------------------------- | ------------------------------------- | ---------------------------------------------- | ------------------------------------------------------------ | -------- | ------------------ | -------- | -------- | ---------- | ---------- | -------- | -
|                                         |                                       |                                                |                                                              |          |                   
|                                         |                                       |                                                |                                                              |          | Year to date      
|                                         |                                       |                                                |                                                              |          | Twelve weeks ended
|                                         |                                       |                                                |                                                              |          | Sep 20,            |          | Sep 21, 
|                                         |                                       |                                                |                                                              |          | 2003               |          | 2002    
|                                         |                                       |                                                |                                                              |          |                    |          |         
|CASH FLOWS FROM OPERATING ACTIVITIES     |                                       |                                                |                                                              |          |                    |          |          |           
|Net Loss                                 |                                       | $                                              | (181,000                                                     | )        |                    | $        | (774,000 | )         
|Adjustments to reconcile net loss to     |                                       |                                                |                                                              |          |                    |          |          |           
|                                         | net cash used in operating activities |                                                |                                                              |          |                    |          |          |            |           
|                                         |                                       | Depreciation and amortization                  |                                                              |          | 206,000            |          |          |            | 250,000    |         
|                                         |                                       | Change in cumulative translation adjustment    |                                                              |          | (47,000            | )        |          |            | (34,000    | )       
|                                         |                                       | Changes in assets and liabilities:             |                                                              |          |                    |          |          |            |            |         
|                                         |                                       |                                                | (Increase) Decrease in accounts receivable trade, net        |          |                    | (139,000 | )        |            |            | 51,000   |  
|                                         |                                       |                                                | (Increase) Decrease in inventory                             |          |                    | (152,000 | )        |            |            | 112,000  |  
|                                         |                                       |                                                | Decrease (Increase) in prepaid expenses                      |          |                    | 147,000  |          |            |            | (50,000  | )
|                                         |                                       |                                                | Decrease in notes receivable, related party                  |          |                    | 6,000    |          |            |            | 30,000   |  
|                                         |                                       |                                                | Decrease (Increase) in other assets                          |          |                    | 41,000   |          |            |            | (242,000 | )
|                                         |                                       |                                                | Increase (Decrease) in accounts payable and accrued expenses |          |                    | 51,000   |          |            |            | (182,000 | )
|                                         |                                       |                                                | Decrease in accrued payroll and related liabilities          |          |                    | (193,000 | )        |            |            | (281,000 | )
|                                         |                                       |                                                |                                                              |          |                    |          |          |           
|                                         | Net cash used by operating activities |                                                |                                                              | (261,000 | )                  |          |          | (1,120,000 | )         
|                                         |                                       |                                                |                                                              |          |                    |          |          |           
|CASH FLOWS FROM INVESTING ACTIVITIES     |                                       |                                                |                                                              |          |                    |          |          |           
|                                         | Capital expenditures                  |                                                |                                                              | (37,000  | )                  |          |          | (49,000    | )         
|                                         |                                       |                                                |                                                              |          |                    |          |          |           
|                                         | Net cash used by investing activities |                                                |                                                              | (37,000  | )                  |          |          | (49,000    | )         
|                                         |                                       |                                                |                                                              |          |                    |          |          |           
|CASH FLOWS FROM FINANCING ACTIVITIES     |                                       |                                                |                                                              |          |                    |          |          |           
|Borrowings on debt obligations           |                                       |                                                |                                                             |          |                    |          | 77,000   |           
|Payments on debt obligations             |                                       |                                                | (444,000                                                     | )        |                    |          | (96,000  | )         
|                                         |                                       |                                                |                                                              |          |                    |          |          |           
|                                         |                                       | Net cash used by financing activities          |                                                              |          | (444,000           | )        |          |            | (19,000    | )       
|                                         |                                       |                                                |                                                              |          |                    |          |          |           
|                                         |                                       | Net decrease                                   |                                                              |          | (742,000           | )        |          |            | (1,188,000 | )       
|                                         |                                       | Cash and cash equivalents, beginning of period |                                                              |          | 1,357,000          |          |          |            | 1,958,000  |         
|                                         |                                       |                                                |                                                              |          |                    |          |          |           
|CASH and CASH EQUIVALENTS, END OF PERIOD |                                       | $                                              | 615,000                                                      |          |                    | $        | 770,000  |           
|                                         |                                       |                                                |                                                              |          |                    |          |          |           

See accompanying notes to consolidated financial statements

F-5





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##### 



Cuisine Solutions, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
(Unaudited)

|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |        |                  |         |       |         |  |         |   |           |   |          |  
|--------------------------- | ------------------------ | --------------------------- | ------- | ------ |  | ------- | ---------- | ----------- | - | ----------- | ----------- | ----------- | -------- | ---------------- | ------ | ---------------- | ------- | ----- | ------- |  | ------- | - | --------- | - | -------- | -
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |        | Unrealized Gains |         |       |         |  |         |   |           |  
|                            |                          |                             |         |        |  |         |            | Additional  |   |             |             |             |          | (Losses) on Debt |        | Cumulative       |         | Total
|                            |                          |                             |         | Common |  | Paid-In |            | Accumulated |   | and Equity  |             | Translation |          | Stockholders'   
|                            |                          |                             |         | Stock  |  | Capital |            | Deficit     |   | Investments |             | Adjustment  |          | Equity          
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                 
|Balance, June 28, 2003      |                          | $                           | 159,000 |        |  | $       | 26,284,000 |             |   | $           | (19,486,000 | )           |          | $                | 59,000 |                  |         | $     | 450,000 |  |         | $ | 7,466,000 |  
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |        |                  |         |       |         |  |         |   |           |  
|                            |                          | First quarter 2004 net loss |         |        |  |         |            |             |   |             |             |             | (181,000 | )                |        |                  |         |       |         |  |         |   |           |   | (181,000 | )
|                            | Other Comprehensive Loss |                             |         |        |  |         |            |             |   |             |             |             |          |                  |        |                  |         |       |         |  |         |   |           |   |         
|                            |                          | Unrealized loss on debt     |         |        |  |         |            |             |   |             |             |             |          |                  |        |                  |         |       |         |  |         |   |           |   |         |  
|                            |                          | and equity investments      |         |        |  |         |            |             |   |             |             |             |          |                  |        |                  | (11,000 | )     |         |  |         |   |           |   | (11,000  | )
|                            |                          | Translation adjustment      |         |        |  |         |            |             |  |             |             |             |          |                  |        |                  |         |       |         |  | (47,000 | ) |           |   | (47,000  | )
|                            |                          | Other Comprehensive Loss    |         |        |  |         |            |             |   |             |             |             |          |                  |        |                  |         |       |         |  |         |   |           |   | (58,000  | )
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |        |                  |         |       |         |  |         |   |           |  
|Comprehensive Loss          |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |        |                  |         |       |         |  |         |   | (239,000  | )
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |        |                  |         |       |         |  |         |   |           |  
|Balance, September 20, 2003 |                          | $                           | 159,000 |        |  | $       | 26,284,000 |             |   | $           | (19,667,000 | )           |          | $                | 48,000 |                  |         | $     | 403,000 |  |         | $ | 7,227,000 |  
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |        |                  |         |       |         |  |         |   |           |  

|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |         |                  |         |       |        |  |         |   |            |   |          |  
|--------------------------- | ------------------------ | --------------------------- | ------- | ------ |  | ------- | ---------- | ----------- | - | ----------- | ----------- | ----------- | -------- | ---------------- | ------- | ---------------- | ------- | ----- | ------ |  | ------- | - | ---------- | - | -------- | -
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |         | Unrealized Gains |         |       |        |  |         |   |            |  
|                            |                          |                             |         |        |  |         |            | Additional  |   |             |             |             |          | (Losses) on Debt |         | Cumulative       |         | Total
|                            |                          |                             |         | Common |  | Paid-In |            | Accumulated |   | and Equity  |             | Translation |          | Stockholders'   
|                            |                          |                             |         | Stock  |  | Capital |            | Deficit     |   | Investments |             | Adjustment  |          | Equity          
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                 
|Balance, June 29, 2002      |                          | $                           | 159,000 |        |  | $       | 26,284,000 |             |   | $           | (15,394,000 | )           |          | $                | 10,000  |                  |         | $     | 97,000 |  |         | $ | 11,156,000 |  
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |         |                  |         |       |        |  |         |   |            |  
|                            |                          | First quarter 2003 net loss |         |        |  |         |            |             |   |             |             |             | (774,000 | )                |         |                  |         |       |        |  |         |   |            |   | (774,000 | )
|                            | Other Comprehensive Loss |                             |         |        |  |         |            |             |   |             |             |             |          |                  |         |                  |         |       |        |  |         |   |            |   |         
|                            |                          | Unrealized loss on debt     |         |        |  |         |            |             |   |             |             |             |          |                  |         |                  |         |       |        |  |         |   |            |   |         |  
|                            |                          | and equity investments      |         |        |  |         |            |             |   |             |             |             |          |                  |         |                  | (43,000 | )     |        |  |         |   |            |   | (43,000  | )
|                            |                          | Translation adjustment      |         |        |  |         |            |             |  |             |             |             |          |                  |         |                  |         |       |        |  | (34,000 | ) |            |   | (34,000  | )
|                            |                          | Other Comprehensive Loss    |         |        |  |         |            |             |   |             |             |             |          |                  |         |                  |         |       |        |  |         |   |            |   | (77,000  | )
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |         |                  |         |       |        |  |         |   |            |  
|Comprehensive Loss          |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |         |                  |         |       |        |  |         |   | (851,000   | )
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |         |                  |         |       |        |  |         |   |            |  
|Balance, September 21, 2002 |                          | $                           | 159,000 |        |  | $       | 26,284,000 |             |   | $           | (16,168,000 | )           |          | $                | (33,000 | )                |         | $     | 63,000 |  |         | $ | 10,305,000 |  
|                            |                          |                             |         |        |  |         |            |             |   |             |             |             |          |                  |         |                  |         |       |        |  |         |   |            |  

F-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 Securities
and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
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 2004 and 2003 contain 12 weeks, and
the third quarter contains 16 weeks.

3)    Inventory

Inventories are valued at the lower of cost, determined by the first-in,
first-out method (FIFO), or market. Included in inventory costs are raw
materials, labor and manufacturing overhead.

Inventory consists of:

|                                      |  |           |           |          |  |   |           |  
|------------------------------------- |  | --------- | --------- | -------- |  | - | --------- | -
|                                      |  | Sept. 20, |           | June 28,
|                                      |  | 2003      |           | 2003    
|                                     
|Raw materials                         |  | $         | 1,282,000 |          |  | $ | 1,140,000 |  
|Frozen product & other finished goods |  |           | 2,846,000 |          |  |   | 2,892,000 |  
|Packing materials & supplies          |  |           | 441,000   |          |  |   | 449,000   |  
|                                      |  |          
|                                      |  |           | 4,569,000 |          |  |   | 4,481,000 |  
|Less obsolescence reserve             |  |           | (361,000  | )        |  |   | (425,000  | )
|                                      |  |          
|                                      |  | $         | 4,208,000 |          |  | $ | 4,056,000 |  
|                                      |  |          

4)    Dividends  None.

5)    Commitments and Contingencies

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.

6)    Transaction with Related Parties

The Company received $7,000 from Food Research Corporation (FRC) for
payment related to a receivable from Classic European Bakers, LLC (CEB). CEB
is owned by FRC, the majority owner of

7



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Cuisine Solutions common shares. The
receivables were primarily associated with unpaid rent related to a rental
agreement for office space used by CEB at the Companys premises in Alexandria.

The Company has receivables of $13,000 at September 20, 2003 from its
President who sponsored a marketing event with the Young Presidents
Organization in France. The amount is non-interest bearing and expected to be
paid during fiscal year 2004.

The Company recorded an accrual in the amount of $268,000 to SOMDIAA at
September 20, 2003. 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) and FRC is owned by Secria 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 recorded 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 but key employees. The total accrual at September 20, 2003
includes coverage for previous years benefits.

On June 12, 2001, the Company signed an agreement to create a partnership
to build a sous-vide processing facility in Chile. The purpose of the facility
would be to produce high quality, value priced whitefish, shellfish and salmon
products in Chile for the Global Retail and Foodservice markets. Cuisine
Solutions, Inc. would sell the Norwegian facility to the Chilean Group for
approximately $3,900,000, the sole investment required to own 48% of the new
joint venture, Cuisine Solutions Chile. The agreement was terminated without
any prejudice between the partners during fiscal year 2003 due to
administrative difficulties. However, the partners continue to develop the
facility in Chile and agreed that the Company hold 10% of the total shares of
Cuisine Solutions Chile S.A. A marketing agreement to market certain sous-vide
products has been signed between the partners in June 2003 and a commercial
agreement to commit to the purchase of certain raw materials from Cuisine
Solutions Chile has been signed in August 2003.

On October 22, 2003, the Company entered into a six month term loan in the
amount of $500,000 with Food Investors Corporation (FIC) to provide short
term working capital necessary to expand operations for fiscal year 2004. The
loan bears interest of 5% per annum and is payable upon maturity.

7)    Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing net
income (loss) by the weighted average number of common shares outstanding
during the period. Diluted net income (loss) per common share also includes
common equivalent shares outstanding during the period if dilutive. The
Companys common equivalent shares consist of stock options. The weighted
average number of shares outstanding related to stock options were 1,539,500.
For the periods ended September 20, 2003, and September 21, 2002, the assumed
exercise of the Companys outstanding stock options are not included in the
calculation 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 accordingly associated
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 option 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
net income (loss) and basic and diluted net income

8



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(loss) per common share
would have been changed to the following pro forma amounts:

|                                                                                    |                                 |   |          |            |          |   |          |            |  
|----------------------------------------------------------------------------------- | ------------------------------- | - | -------- | ---------- | -------- | - | -------- | ---------- | -
|                                                                                    |                                 |   | Sep. 20, |            | Sep. 21,
|                                                                                    |                                 |   | 2003     |            | 2002    
|                                                                                    |                                 |   |          |            |         
|Net loss applicable to common shareholders                                          |                                 | $ | (181,000 | )          |          | $ | (774,000 | )         
|Less: Total stock-based compensation expense
determined under the fair value method |                                 | $ | (42,000  | )          |          | $ | (48,000  | )         
|Pro forma net loss                                                                  |                                 | $ | (223,000 | )          |          | $ | (822,000 | )         
|Earnings per common share:                                                          |                                 |   |          |            |          |   |          |           
|                                                                                    | Basic and diluted  as reported |   | $        | (0.01      | )        |   | $        | (0.05      | )
|                                                                                    | Basic and diluted  pro forma   |   | $        | (0.01      | )        |   | $        | (0.05      | )
|Weighted average common shares outstanding:                                         |                                 |   |          |            |          |   |          |           
|                                                                                    | Basic and diluted               |   |          | 15,824,788 |          |   |          | 15,824,588 |  

9



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Item 2. 
Managements Discussion and Analysis of Financial Condition and Results of Operations

This filing contains forward-looking statements within the meaning of
Section 27A of The Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. Those statements reflect the
intent, belief or current expectations of the Company and members of the
management team. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risk and uncertainties and that actual results may differ materially from those
contemplated by such forward-looking statements reflecting changed assumptions,
the occurrence of unanticipated events or changes to future operating results
over time.

RESULTS OF OPERATIONS

Cuisine Solutions, Inc. reported a net loss of $181,000 for the first
quarter of fiscal 2004 compared to a net loss of $774,000 a year ago. The
decrease in loss was primarily driven by a 28% reduction in selling and
administration cost and a result of the restructuring of USA operations at the
end of fiscal year 2003.

Revenue in the first quarter 2004 increased from $6,423,000 to $7,102,000,
a 10.6% increase compared to the previous year primarily due to the growth of
Retails sales in France and Military sales in the USA. Cuisine Solutions France
was consistently increasing retail sales to a French retailer during the past
months and military sales through a broker in the USA were regained after the
decrease in fiscal year 2003.

NET SALES

First quarter 2004 revenue of $7,102,000 increased as described above by
10.6% compared to previous years first quarter revenue of $6,423,000.

|                            |  |                |           |                |  |         |           |         |  |   |          |   |  |  |       |   
|--------------------------- |  | -------------- | --------- | -------------- |  | ------- | --------- | ------- |  | - | -------- | - |  |  | ----- | --
|                            |  | Q1 Fiscal 2004 |           | Q1 Fiscal 2003 |  | $Change |           | %Change
|                            |  |                |           |                |  |         |           |        
|USA                         |  | $              | 4,175,000 |                |  | $       | 3,941,000 |         |  | $ | 234,000  |   |  |  | 5.9   | % 
|Norway                      |  |                | 367,000   |                |  |         | 490,000   |         |  |   | (123,000 | ) |  |  | (25.1 | %)
|France                      |  |                | 2,560,000 |                |  |         | 1,992,000 |         |  |   | 568,000  |   |  |  | 28.5  | % 
|                            |  |               
|Total Product Sales Revenue |  | $              | 7,102,000 |                |  | $       | 6,423,000 |         |  | $ | 679,000  |   |  |  | 10.6  | % 
|                            |  |               

USA SALES

Fiscal year 2004 first quarter sales in the USA increased $234,000 to
$4,175,000, a 5.9% increase from the previous year first quarter sales of
$3,941,000.

Cuisine Solutions USA Fiscal Year 2004 first quarter sales by sales
channel:

|                  |  |         |           |         |  |         |           |         |  |   |          |   |  |  |      |   
|----------------- |  | ------- | --------- | ------- |  | ------- | --------- | ------- |  | - | -------- | - |  |  | ---- | --
|                  |  | Q1 FY04 |           | Q1 FY03 |  | $Change |           | %Change
|                  |  |         |           |         |  |         |           |        
|Food Service      |  | $       | 1,081,000 |         |  | $       | 999,000   |         |  | $ | 82,000   |   |  |  | 8.2  | % 
|On Board Services |  |         | 2,136,000 |         |  |         | 2,248,000 |         |  |   | (112,000 | ) |  |  | (5.0 | %)
|Retail            |  |         | 284,000   |         |  |         | 230,000   |         |  |   | 54,000   |   |  |  | 23.5 | % 
|Military          |  |         | 417,000   |         |  |         | 241,000   |         |  |   | 176,000  |   |  |  | 73.0 | % 
|New Business      |  |         | 257,000   |         |  |         | 223,000   |         |  |   | 34,000   |   |  |  | 15.3 | % 
|                  |  |        
|Total             |  | $       | 4,175,000 |         |  | $       | 3,941,000 |         |  | $ | 234,000  |   |  |  | 5.9  | % 
|                  |  |        

10



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First quarter fiscal 2004 sales to the USA Foodservice channel increased
8.2% in the USA to $1,081,000 from the previous year first quarter sales of
$999,000. The increase was driven by increased sales to hotels and convention
centers since occupancy rates were higher and businesses held more banquet
events compared to the previous year. The Foodservice channel provides the
highest gross margins to the Company and focuses sales efforts on key accounts,
large events, and use distributors to manage lower volume opportunities.
Cuisine Solutions will continue to increase direct sales via the call center
which allows an internal customer service group to follow up on sales and
initiate sales activity without the direct use of our formal Foodservice Sales
force. This allows more time and effort of the direct sales force to be focused
on generating new accounts and introduction of new products into existing
accounts. Customers in the Foodservice sales channel place high value on the
labor savings, quality, consistency and food safety associated with Cuisine
Solutions product. Management believes this value increases in the current
economic and political situation challenging todays business environment. In
the meantime, Management has and will continue further cost reduction programs
and product line changes to meet the changing needs of the industry.

Fiscal 2004 first quarter sales to the On Board services channel totaled
$2,136,000 versus previous year first quarter sales of $2,248,000, a decrease
of $112,000 or 5.0%. Sales to the On Board Services sales are lower compared to
previous years since the airline industry is still cutting back cost. The On
Board services channel will continue to strengthen the business relationships
with most of the major US airlines and passenger rail lines through continued
value and service increase and flexible solutions upon the current demand in
the industry.

Retail sales for the first quarter of fiscal 2004 increased $54,000 to
$284,000 from $230,000 during the same period of the previous year due to the
additional product roll-out of a premium frozen food project to a
North-American retailer. The Company had further promising presentations to
other retailers during the first quarter of fiscal 2004 for the premium
packaged frozen food products and anticipates product rollouts during the
remainder of fiscal year 2004. Cuisine Solutions France has also placed premium
private label products successfully into the French retail industry and was
able to consistently expand sales to a French retailer during the last three
quarters.

Military sales for the first quarter 2004 increased $176,000 or 73.0% to
$417,000 from $241,000 during the same period in fiscal 2003 primarily due to
regaining of sales to navy carriers. The Company will further support the
growing opportunity for this sales channel not only with the Navy but also with
the US Army, Air Force and Marine Corps.

New Business sales for the first quarter of fiscal year 2004 amounted to
$257,000, up from $223,000 in fiscal 2003. The sales increase of $34,000 is
attributed to increased sales to national restaurant chains. The Company will
further pursue its role as a supplier for national restaurant chains that have
found that the Companys product quality and ease of use makes an attractive
alternative for providing promotional menu items.

NORWAY SALES

During the first quarter of fiscal 2004, total Norwegian sales volume
increased 19.6% to 7,862,000 Norwegian Kroner from 6,572,000 Norwegian Kroner
during the first quarter of fiscal 2003. The sales amount converted to US
dollars amounted to $1,068,000 in the first quarter of fiscal 2004 and $872,000
during the first quarter of fiscal 2003 before the elimination of inter-company
balances. Inter-company sales from Cuisine Solutions Norway are eliminated and
reported as sales from either Cuisine Solutions France or Cuisine Solutions
USA. Inter-company sales to the USA and France account for 65.6% compared to
43.8% during the same period in the previous fiscal year. Total production and
inter-company sales measured in US Dollars were up 22.5% during the first
quarter of fiscal 2004 versus the same period in the previous year.

11



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Total Norwegian sales before inter-company eliminations in both US dollars
and Norwegian Kroners were as follows:

|                           |  |                 |           |                 |  |         |           |         |  |  |           |  |  |  |      |  
|-------------------------- |  | --------------- | --------- | --------------- |  | ------- | --------- | ------- |  |  | --------- |  |  |  | ---- | -
|                           |  | Fiscal 2004     |           | Fiscal 2003     |  |         |           |         |  |  |           | 
|                           |  | Norway Q1 Sales |           | Norway Q1 Sales |  | $Change |           | %Change
|                           |  |                 |           |                 |  |         |           |        
|Sales in US Dollars        |  |                 | 1,068,000 |                 |  |         | 872,000   |         |  |  | 196,000   |  |  |  | 22.5 | %
|Sales in Norwegian Kroners |  |                 | 7,862,000 |                 |  |         | 6,572,000 |         |  |  | 1,290,000 |  |  |  | 19.6 | %
|Average Exchange Rate      |  |                 | 7.361     |                 |  |         | 7.537     |         |  |  |           |  |  |  |      |  

Cuisine Solutions anticipates an increase in retail sales of salmon in the
second quarter of fiscal year 2004 due to the seasonal increase in demand.

FRANCE SALES

The total fiscal year 2004 first quarter sales in US dollars were
$2,560,000 versus previous year sales of $1,992,000, an increase of $568,000 or
28.5%. Sales in EURO during the same period were EURO 2,278,000 versus EURO
2,024,000 respectively, an increase of 12.6%. The differences in the increase
are due to the US dollar-EURO fluctuations in the exchange rate for the
respective periods.

Cuisine Solutions France fiscal year 2004 first quarter sales compared to
prior year first quarter and respective exchange rates are as follows:

|                      |  |                 |           |                 |  |         |           |         |  |  |         |  |  |  |      |  
|--------------------- |  | --------------- | --------- | --------------- |  | ------- | --------- | ------- |  |  | ------- |  |  |  | ---- | -
|                      |  | Fiscal 2004     |           | Fiscal 2003     |  |         |           |         |  |  |         | 
|                      |  | France Q1 Sales |           | France Q1 Sales |  | $Change |           | %Change
|                      |  |                 |           |                 |  |         |           |        
|Sales in US Dollars   |  |                 | 2,560,000 |                 |  |         | 1,992,000 |         |  |  | 568,000 |  |  |  | 28.5 | %
|Sales in EURO         |  |                 | 2,278,000 |                 |  |         | 2,024,000 |         |  |  | 254,000 |  |  |  | 12.6 | %
|Average Exchange Rate |  |                 | 0.890     |                 |  |         | 1.017     |         |  |  |         |  |  |  |      |  

Cuisine Solutions France increase in sales was primarily driven by higher
retail sales of private label packaged products as well as higher sales in the
foodservice sector. Cuisine Solutions France was able to consistently increase
sales to a French retailer during the three quarters. In addition, foodservice
operators are forced to deal with the thirty-five hour work week constraint and
have discovered that the Cuisine Solutions product line offers a solution to
the limited availability and higher cost of labor created as result of the
mandated work hour rules.

GROSS MARGINS

|                        |  |                        |       |          |  |   |       |  
|----------------------- |  | ---------------------- | ----- | -------- |  | - | ----- | -
|                        |  | Quarter Ended         
|                        |  |                       
|                        |  | Sep. 20,               |       | Sep. 21,
|                        |  | 2003                   |       | 2002    
|                        |  |                        |       |         
|                        |  | (dollars in thousands)
|Net sales               |  | $                      | 7,102 |          |  | $ | 6,423 |  
|Gross margin percentage |  |                        | 16.9  | %        |  |   | 17.1  | %
|Loss from operations    |  | $                      | (159  | )        |  |   | (750  | )

12



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Gross margins decreased compared to fiscal year 2003 due to the fact that
certain employees of the Companys engineering personnel are currently
providing support to the production of USA operations and as such are included
in Cost of goods sold, whereas those resources supported international
operations last fiscal year and related costs were included in Selling and
Administrative expenses.

Gross margins in the USA and France are actually up by 2% and 5%
respectively as a result of the reduction of personnel in Alexandria and cost
reductions achieved through alternative sources of supply and product mix
changes.

Gross margins for the plant in Norway are negative due to the decrease in
demand of the Norwegian product line after the slowdown of the economy which in
turn impacted the ability to cover fixed production overhead cost due to the
reduction in production. However, all controllable costs in Norway have been
managed during the first quarter of fiscal 2004.

Cuisine Solutions management is confident that larger sales volume with
its impact to fixed costs and continued aggressive cost management will result
in higher gross margins. The gross margin in France is expected to stay at
approximately 20% due to heavy price competition in the retail sector.

Selling and Administrative Expenses

A comparison of selling and general administrative costs follows:

|                                 |  |                        |       |          |  |   |       | 
|-------------------------------- |  | ---------------------- | ----- | -------- |  | - | ----- | 
|                                 |  | Quarter Ended         
|                                 |  |                       
|                                 |  | Sep. 20,               |       | Sep. 21,
|                                 |  | 2003                   |       | 2002    
|                                 |  |                        |       |         
|                                 |  | (dollars in thousands)
|Selling and administrative costs |  | $                      | 1,242 |          |  | $ | 1,715 | 

Selling and administrative expenses decreased $473,000 or 27.6% in the
first quarter of fiscal 2004 versus the first quarter of fiscal 2003. Expenses
as a percent of sales were 17.5% in the first quarter of fiscal 2004 versus
26.7% in fiscal 2003. The decrease was due to the aggressive cost management
and attributed to the reduction of personnel in Alexandria as well as tying
incentive compensation plans to performance. In addition, certain costs related
to the Companys engineering resources were included in Cost of goods sold this
fiscal year, whereas similar costs were included in Selling and Administrative
expenses during fiscal year 2003 (see GROSS MARGINS). Management does
continue tight management of selling and administrative expenses.

Depreciation and Amortization

Depreciation and amortization decreased $44,000 to $206,000 for the first
quarter of fiscal year 2004, compared with $250,000 for the same period a year
ago. This decrease is related to equipment reaching its useful life and
correspondingly has been fully depreciated.

Non-operating Income and Expense

Investment income consists of returns earned on funds invested in
corporate bonds and treasury bills, and interest expenses relates to the
borrowings of the Companys Norwegian and French subsidiaries, including the
Norwegian capital lease.

Management maintains these funds in a trust account with the majority of
the funds invested in government securities.

13



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At September 20, 2003, the Company had borrowings of $3,217,000, bearing
interest at rates ranging from 3.3% to 6.6%. The majority of these borrowings
of $2,490,000 were through its Norwegian subsidiary and includes an outstanding
principal amount of $1,235,000 for the capital lease on the building in Norway
and $1,047,000 allowed under the working capital line of credit with Den norske
Bank. Cuisine Solutions France has a remaining principal balance on a term loan
in the amount of $11,000 at 5.6% obtained to finance plant expansion. The
original loan amount equated to approximately $500,000 in September 1998 and
the loan is due by the end of September 2003. In December 2000, Cuisine
Solutions France 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 loan. The current portion of this loan is
$117,000 and the total outstanding principal amounts to $209,000 at September
20, 2003. 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 EURO190,000 or $216,000. This loan bears
interest of 5.7% and is due in October 2012. The current portion of this loan
is $17,000 and the total outstanding principal amounts to $203,000 at September
20, 2003. In March 2003, Cuisine Solutions France entered into a five year term
loan to further expand the facility in the amount of EURO280,000 or $318,000.
This loan bears interest of 3.3% and is due in June 2008. The current portion
of this loan is $60,000 and the total outstanding principal amounts to $303,000
at September 20, 2003.

Provision for Taxes

No provision for income taxes was made during the first quarter of fiscal
2004 due to the Companys continued losses.

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 sales 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.

The Companys costs of its Norwegian subsidiary are denominated in
Norwegian Kroner. Sales of products from its Norwegian subsidiary are made in
the currency of the purchasing jurisdiction and are subsequently recorded in
Norwegian Kroner. The Company plans to change the billing from Norwegian Kroner
to the EURO to reduce the exchange rate risk and to minimize the financing cost
of the Norwegian subsidiary. The Company does engage in forward contracts for
Norway shipments to the USA where these shipments are predictable with the
objective of protecting planned profit margins. The USA does not purchase
product from France and therefore, does not have any exposure to foreign
exchange other than translation adjustments during consolidations.

During the first quarter of fiscal year 2004, the sales to Airline
accounts and railroad companies were approximately 40% of total revenues and
sales to the Foodservice Industry 30%, primarily to hotel restaurants and
banquets. Both of these industries have been affected due to the decreased
travel related to the September 11, 2001 tragedy. Management is confident that
the business cycle will swing back as well as possibly offer new opportunities
for the Company. Management has initiated significant cut backs and re-focused
efforts to accelerate sales to all sales channels.

Management cannot predict what the final outcome may be or the return to
normal business travel, nor can it completely identify all of the potential new
opportunities that may be available.

14



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Liquidity and Capital Resources

At September 20, 2003, the Companys combined total of cash and short-term
investment balances was $615,000, compared with $1,357,000 at June 28 2003.
This decrease is the result of the operating loss, and the reduction of debt.
Additionally, the Company held long term investments of $1,320,000 and
$1,331,000 at September 20, 2003 and June 28, 2003, respectively, with
maturities greater than one year. Long term investments are used as collateral
for the Standby Letter of Credit to secure the overdraft facility of the
Norwegian subsidiary. There is no other restriction on cash balances at the end
of the fiscal 2004 first quarter.

Net cash used by operations amounted to $261,000 for year to date 2004,
compared to cash used of $1,120,000 a year ago. Cash in the amount of $37,000
was used by investing activities, largely due to the investment in new
production equipment. Cash in the amount of $444,000 was used by financing
activities and related to the regular payments of the borrowings as well as to
the Norwegian operations expanded use of a working capital line of credit.

The Companys Norwegian subsidiary has secured a working capital
commitment for its liquidity needs in Norway in the form of an overdraft
facility. As of September 20, 2003, the Company used the maximum amount
available under line of credit which is currently $1,047,000.

Future Prospects

Marketing Efforts

In fiscal year 2004, the Companys strategy will involve stabilizing the
business to the existing customers and increasing the Cuisine Solutions market
share while exploring new opportunities of pre-prepared frozen entrees in the
banquet, airline, rail and retail industries as well as to the military.

Foodservice

The Foodservice channel will continue to manage the hotel restaurant menu
program while working to reduce distribution costs of shipping direct to
hotels. The fiscal 2004 strategy involves the continued penetration into large
key national accounts, banquet centers and casinos. Demand for foodservice
product in France increased significantly during the past two years and expects
further growth for fiscal 2004 due to the continued customer satisfaction with
the quality and variety of product offered by the Company. Foodservice
operators in France are forced to deal with the thirty-five hour work week
constraint and have discovered the Cuisine Solutions product line offers a
solution to the limited availability and higher cost of labor created as a
result of the mandated work hour rules. Customers in the Foodservice sales
channel place high value on the labor savings, quality, consistency and food
safety associated with Cuisine Solutions product. Management has and will
continue with aggressive cost reduction programs and product line changes to
meet the changing needs of the industry.

On Board Services

On Board Services was highly affected by the slowdown of the travel
industry over the past two years. Cuisine Solutions attempts to pursue growth
in sales by focusing on airlines and railway companies in USA and in Europe. As
the airline and related support industries consolidate their workforces,
management is exploring every opportunity to provide the airlines with high
quality first class and business class meals, providing greater flexibility and
less labor. The Company is developing the Buy-on-Board meal program with
several airlines and anticipates the launch of the program towards the end of
fiscal year 2004.

15



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Retail

Retail objectives for fiscal year 2004 include the further penetration
into the USA in-store deli of targeted retailers as well as the further product
rollout of premium frozen retail products into the USA and French market. The
benefit of retail sales includes high volume potential, economies of scale from
production and lower distribution and administrative cost per sales order.
Management initiated a strategic effort into retail sales in order to diversify
the sales channels of the Company and to provide the opportunity for large
volume sales that would increase the efficiency of the total Company product
line.

France

Cuisine Solutions France has experienced sales growth during the last
three years, contributing to the Companys cash flow since its acquisition in
1999. Management will continue with its strategic sales plan to expand the
selling efforts not only in France but in other European countries, especially
in Germany and the United Kingdom. Although the overall travel industry
suffered declines during the past fiscal year, management credits both the
thirty-five hour work week rule and its impact on labor cost in France for the
increase in demand for the Foodservice channel as well as aggressive cost
control resulting in a positive net income for Cuisine Solutions France.

Cuisine Solutions France will continue to pursue additional product line
expansion into the On Board Services and retail markets and attempt to increase
its market share and product awareness.

16



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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
Norwegian subsidiarys sales are denominated in Norwegian Kroner while the
French subsidiary reports in EURO. As currency exchange rates, translation of
the income statements of the Norway and 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 41% of the
Companys sales. The net assets of the subsidiaries are approximately 45% of
the Companys net assets. The Company does not enter into hedges 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 future performance of the Companys efforts will depend on a number of
factors. One is the recovery of the travel industry, and specifically the
airlines, which have been a major source of Cuisine Solutions revenue and
formal business strategy. The others involve the introduction and roll-out of
new product lines into the Retail sector. Although the economic situation with
the airlines is believed to be temporary, Management cannot forecast the length
and total impact of the current economic cycle. Cuisine Solutions will position
itself to provide maximum value to our airline partners during this difficult
period and remain prepared to resume business growth when the industry
completely recovers. Cuisine Solutions Management has positioned additional
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.

Item 4.  Controls and Procedures

Within 90 days prior to the date of this report, Management carried out an
evaluation of the effectiveness of the design and operation of the Companys
disclosure controls and procedures, pursuant to Exchange Act Rule 13a-14 and
15d-14. Based on the foregoing, the Principal Executive Officer, the Chief
Operating Officer and Principal Financial Officer concluded that the Companys
disclosure controls and procedures are effective to timely alert them to any
material information relating to the Company that must be included in the
Companys periodic SEC filings. In addition, there have been no significant
changes in the Companys internal controls or in other factors that could
significantly affect internal controls subsequent to the date of the most
recent evaluation.

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CUISINE SOLUTIONS, INC.

PART II:  OTHER INFORMATION

Item 1.  Legal Proceedings.

At the end of fiscal year 2002, the Company has 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 the loan of
$763,000, and in addition the management and administrative fees of $895,000
according to the Joint Venture agreement with the Brazilian Partner. 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.

Cuisine Solutions, Inc. has been named as a Co-Defendant in a civil
garnishment action in the amount of $625,000 styled Caisse Regionale du
Morbihan et de Loire Atlantique du Credit Maritime versus Food Research
Corporation, currently pending in the Circuit Court of Fairfax County,
Virginia. In this case, Plaintiff alleges that it obtained a judgment against
Food Research Corp. in France, which it now seeks to enforce upon assets of
Cuisine Solutions, Inc. in the Commonwealth of Virginia.

In September 2003, Cuisine Solutions filed its answer to Plaintiffs
garnishment summons, denying that it possesses or controls any funds, assets or
any other property belonging to Food Research Corp. Accordingly, Cuisine
Solutions denies any liability in this case.

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 4.  Submission of Matters to a Vote of Security Holders

The Companys 20th annual meeting of shareholders was held on October 22,
2003 in Alexandria, Virginia at the Hilton Alexandria Mark Center. The
following individuals were re-elected to serve as Directors for a period of one
year and until their successors are elected and qualify: Jean-Louis Vilgrain
(Chairman), Stanislas Vilgrain (President & CEO), Sebastien Vilgrain, Mr.
Charles McGettigan and Mr. Robert van Roijen.

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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: November 3, 2003 | By: /s/Stanislas Vilgrain
Stanislas Vilgrain
President and CEO                               
|                      
|                       | By: /s/Andreas Pfann
Andreas Pfann
Chief Financial Officer,
Treasurer and Corporate Secretary

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