##### 



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 endedSeptember 21, 2002

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 Number0-12800

CUISINE SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)

|                                |  |                                     
|------------------------------- |  | ------------------------------------
|DELAWARE                        |  | 52-0948383                          
|(State or other jurisdiction of |  | (IRS Employer Identification Number)
|incorporation or organization)  |  |                                     

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.

YesX No

Indicate the number of shares outstanding of each of the issuers classes of
common stock as of October 25, 2002.

|                            |  |                 
|--------------------------- |  | ----------------
|Common Stock 0.01 par value |  | Number of Shares
|Class A                     |  | 15,824,588      
|Class B                     |  | None            

1



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##### 



CUISINE SOLUTIONS, INC.

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying unaudited consolidated financial statements have been prepared
by the Company pursuant to the rules and regulations of the 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
(Unaudited)

|                                                                                             |                                                              |                                           |                                             |                                                            |            |            |             |            |            |            |            | 
|-------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | ----------------------------------------- | ------------------------------------------- | ---------------------------------------------------------- | ---------- | ---------- | ----------- | ---------- | ---------- | ---------- | ---------- | 
|                                                                                             |                                                              |                                           |                                             |                                                            |            |           
|                                                                                             |                                                              |                                           |                                             |                                                            |            | Sep 21,    |             | June 29,  
|                                                                                             |                                                              |                                           |                                             |                                                            |            | 2002       |             | 2002      
|                                                                                             |                                                              |                                           |                                             |                                                            |            |            |             |           
|ASSETS                                                                                       |                                                              |                                           |                                             |                                                            |            |            |             |           
|Current Assets                                                                               |                                                              |                                           |                                             |                                                            |            |            |             |           
|                                                                                             |                                                              | Cash and cash equivalents                 |                                             | $                                                          | 770,000    |            |             | $          | 1,958,000  |           
|                                                                                             |                                                              | Accounts receivable, trade                |                                             |                                                            | 3,221,000  |            |             |            | 3,272,000  |           
|                                                                                             | Inventory                                                    |                                           |                                             | 4,307,000                                                  |            |            |             | 4,419,000  |           
|                                                                                             | Prepaid expenses                                             |                                           |                                             | 341,000                                                    |            |            |             | 291,000    |           
|                                                                                             | Current portion of notes receivable, related party           |                                           |                                             | 5,000                                                      |            |            |             | 5,000      |           
|                                                                                             | Other current assets                                         |                                           |                                             | 719,000                                                    |            |            |             | 477,000    |           
|                                                                                             |                                                              |                                           |                                             |                                                            |            |            |             |            |            |           
|                                                                                             |                                                              |                                           | TOTAL CURRENT ASSETS                        |                                                            |            | 9,363,000  |             |            |            | 10,422,000 |           
|Investments, noncurrent                                                                      |                                                              |                                           | 2,565,000                                   |                                                            |            |            | 2,608,000   |           
|Fixed assets, net                                                                            |                                                              |                                           | 4,920,000                                   |                                                            |            |            | 5,121,000   |           
|Note receivable, officer and related party, including accrued interest, less current portion |                                                              |                                           | 8,000                                       |                                                            |            |            | 38,000      |           
|Other assets                                                                                 |                                                              |                                           | 8,000                                       |                                                            |            |            | 8,000       |           
|                                                                                             |                                                              |                                           |                                             |                                                            |            |            |             |            |            |           
|                                                                                             |                                                              |                                           | TOTAL ASSETS                                |                                                            | $          | 16,864,000 |             |            | $          | 18,197,000 |           
|                                                                                             |                                                              |                                           |                                             |                                                            |            |            |             |           
|LIABILITIES AND STOCKHOLDERS EQUITY                                                         |                                                              |                                           |                                             |                                                            |            |            |             |           
|Current liabilities                                                                          |                                                              |                                           |                                             |                                                            |            |            |             |           
|                                                                                             |                                                              | Current portion of long-term debt         |                                             |                                                            | 1,643,000  |            |             |            | 1,585,000  |           
|                                                                                             |                                                              | Accounts payable and accrued expenses     |                                             |                                                            | 2,629,000  |            |             |            | 2,811,000  |           
|                                                                                             |                                                              | Accrued payroll and related liabilities   |                                             |                                                            | 1,025,000  |            |             |            | 1,306,000  |           
|                                                                                             |                                                              |                                           |                                             |                                                            |            |            |             |            |            |           
|                                                                                             |                                                              |                                           |                                             | Total current liabilities                                  |            |            | 5,297,000   |            |            |            | 5,702,000  | 
|Long-term debt, less current portion                                                         |                                                              |                                           | 1,262,000                                   |                                                            |            |            | 1,339,000   |           
|                                                                                             |                                                              |                                           |                                             |                                                            |            |            |             |            |            |           
|                                                                                             |                                                              |                                           |                                             | TOTAL LIABILITIES                                          |            |            | 6,559,000   |            |            |            | 7,041,000  | 
|                                                                                             |                                                              |                                           |                                             |                                                            |            |            |             |           
|Stockholders equity                                                                         |                                                              |                                           |                                             |                                                            |            |            |             |           
|                                                                                             | Common stock  $.01 par value, 20,000,000 shares authorized, |                                           |                                             |                                                            |            |            |             |            |           
|                                                                                             |                                                              |                                           |                                             | 15,824,788 shares issued and 15,824,588 shares outstanding |            |            |             |            |            |            |            | 
|                                                                                             |                                                              |                                           |                                             | at September 21, 2002 and June 29, 2002, 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                                                                          |                                                              |                                           | (16,168,000                                 | )                                                          |            |            | (15,394,000 | )         
|Accumulated Other Comprehensive Income                                                       |                                                              |                                           |                                             |                                                            |            |            |             |           
|                                                                                             | Unrealized (loss) gain on debt and equity investments        |                                           |                                             | (33,000                                                    | )          |            |             | 10,000     |           
|                                                                                             | Cumulative translation adjustment                            |                                           |                                             | 63,000                                                     |            |            |             | 97,000     |           
|                                                                                             | Treasury stock, at cost (0 shares at September 21, 2002      |                                           |                                             |                                                            |            |            |             |            |           
|                                                                                             |                                                              |                                           | and 0 shares at June 29, 2002 respectively) |                                                            |            |           |             |            |            |           |           
|                                                                                             |                                                              |                                           |                                             |                                                            |            |            |             |            |            |           
|                                                                                             |                                                              |                                           |                                             | TOTAL STOCKHOLDERS EQUITY                                 |            |            | 10,305,000  |            |            |            | 11,156,000 | 
|                                                                                             |                                                              |                                           |                                             |                                                            |            |            |             |            |            |           
|                                                                                             |                                                              | TOTAL LIBILITIES AND STOCKHOLDERS EQUITY |                                             | $                                                          | 16,864,000 |            |             | $          | 18,197,000 |           
|                                                                                             |                                                              |                                           |                                             |                                                            |            |            |             |           

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 21,            |         | Sep 22,
|                                           |                                          |                             |            | 2002               |         | 2001   
|                                           |                                          |                             |            |                    |         |        
|NET SALES                                  |                                          | $                           | 6,423,000  |                    |         | $       | 7,335,000  |          
|Cost of goods sold                         |                                          |                             | 5,327,000  |                    |         |         | 5,798,000  |          
|                                           |                                          |                             |            |                    |         |         |            |          
|                                           | GROSS MARGIN                             |                             |            | 1,096,000          |         |         |            | 1,537,000 |         
|Selling and administration                 |                                          |                             | 1,715,000  |                    |         |         | 2,150,000  |          
|Depreciation and amortization              |                                          |                             | 131,000    |                    |         |         | 117,000    |          
|                                           |                                          |                             |            |                    |         |         |            |          
|                                           | LOSS FROM OPERATIONS                     |                             |            | (750,000           | )       |         |            | (730,000  | )       
|                                           |                                          |                             |            |                    |         |         |            |          
|Nonoperating income (expense)              |                                          |                             |            |                    |         |         |            |          
|                                           | Investment income                        |                             |            | 35,000             |         |         |            | 35,000    |         
|                                           | Interest expense                         |                             |            | (48,000            | )       |         |            | (35,000   | )       
|                                           | Loss in equity from investment in Brazil |                             |            |                   |         |         |            | (120,000  | )       
|                                           | Other expense                            |                             |            | (11,000            | )       |         |            | (31,000   | )       
|                                           |                                          |                             |            |                    |         |         |            |          
|                                           |                                          | TOTAL NON-OPERATING EXPENSE |            |                    | (24,000 | )       |            |           | (151,000 | )
|                                           |                                          |                             |            |                    |         |         |            |          
|Loss from operations before income tax     |                                          |                             | (774,000   | )                  |         |         | (881,000   | )        
|Provision for income tax benefit (expense) |                                          |                             |           |                    |         |         |           |          
|                                           |                                          |                             |            |                    |         |         |            |          
|NET LOSS                                   |                                          |                             | (774,000   | )                  |         |         | (881,000   | )        
|                                           |                                          |                             |            |                    |         |         |            |          
|Basic and diluted net loss per share:      |                                          |                             |            |                    |         |         |            |          
|                                           | Net loss per common share                |                             |            | ($0.05             | )       |         |            | ($0.06    | )       
|Weighted average shares outstanding        |                                          |                             | 15,824,588 |                    |         |         | 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 21,            |            | Sep 22, 
|                                         |                                                      |                                  |                                             |                                                                |         | 2002               |            | 2001    
|                                         |                                                      |                                  |                                             |                                                                |         |                    |            |         
|CASH FLOWS FROM OPERATING ACTIVITIES     |                                                      |                                  |                                             |                                                                |         |                    |            |         
|Net Loss                                 |                                                      | $                                | (774,000                                    | )                                                              |         | $                  | (881,000   | )       
|Adjustments to reconcile net loss to     |                                                      |                                  |                                             |                                                                |         |                    |            |         
|                                         | net cash (used in ) provided by operating activities |                                  |                                             |                                                                |         |                    |            |          |         
|                                         |                                                      |                                  | Depreciation and amortization               |                                                                |         | 250,000            |            |          |          | 263,000 |           
|                                         |                                                      |                                  | Loss in equity from investment in Brazil    |                                                                |         |                   |            |          |          | 120,000 |           
|                                         |                                                      |                                  | Change in cumulative translation adjustment |                                                                |         | (34,000            | )          |          |          | 386,000 |           
|                                         |                                                      |                                  | Changes in assets and liabilities:          |                                                                |         |                    |            |          |          |         |           
|                                         |                                                      |                                  |                                             | Decrease in accounts receivable trade, net                     |         |                    | 51,000     |          |          |         | 774,000    |  
|                                         |                                                      |                                  |                                             | Decrease (Increase) in inventory                               |         |                    | 112,000    |          |          |         | (1,002,000 | )
|                                         |                                                      |                                  |                                             | (Increase) Decrease in prepaid expenses                        |         |                    | (50,000    | )        |          |         | 8,000      |  
|                                         |                                                      |                                  |                                             | Decrease in notes receivable, related party                    |         |                    | 30,000     |          |          |         | 389,000    |  
|                                         |                                                      |                                  |                                             | Increase in other assets                                       |         |                    | (242,000   | )        |          |         | (226,000   | )
|                                         |                                                      |                                  |                                             | (Decrease) Increase in accounts payable and accrued expenses   |         |                    | (182,000   | )        |          |         | 176,000    |  
|                                         |                                                      |                                  |                                             | (Decrease) Increase in accrued payroll and related liabilities |         |                    | (281,000   | )        |          |         | 211,000    |  
|                                         |                                                      |                                  |                                             | Increase in other accrued taxes                                |         |                    |           |          |          |         | 6,000      |  
|                                         |                                                      |                                  |                                             |                                                                |         |                    |            |         
|                                         | Net cash (used) provided by operating activities     |                                  |                                             | (1,120,000                                                     | )       |                    |            | 224,000  |         
|                                         |                                                      |                                  |                                             |                                                                |         |                    |            |         
|CASH FLOWS FROM INVESTING ACTIVITIES     |                                                      |                                  |                                             |                                                                |         |                    |            |         
|                                         |                                                      | Increase in investment in Brazil |                                             |                                                                |        |                    |            |          | (53,000  | )      
|                                         |                                                      | Capital expenditures             |                                             |                                                                | (49,000 | )                  |            |          | (569,000 | )      
|                                         |                                                      |                                  |                                             |                                                                |         |                    |            |         
|                                         | Net cash used by investing activities                |                                  |                                             | (49,000                                                        | )       |                    |            | (622,000 | )       
|                                         |                                                      |                                  |                                             |                                                                |         |                    |            |         
|CASH FLOWS FROM FINANCING ACTIVITIES     |                                                      |                                  |                                             |                                                                |         |                    |            |         
|                                         | Additions to debt                                    |                                  |                                             | 77,000                                                         |         |                    |            | 217,000  |         
|                                         | Reductions of debt                                   |                                  |                                             | (96,000                                                        | )       |                    |            |         |         
|                                         |                                                      |                                  |                                             |                                                                |         |                    |            |         
|                                         |                                                      |                                  |                                             | Net cash (used) provided by financing activities               |         |                    | (19,000    | )        |          |         | 217,000    |  
|                                         |                                                      |                                  |                                             |                                                                |         |                    |            |         
|                                         |                                                      |                                  |                                             | Net decrease                                                   |         |                    | (1,188,000 | )        |          |         | (181,000   | )
|                                         |                                                      |                                  |                                             | Cash and cash equivalents, beginning of period                 |         |                    | 1,958,000  |          |          |         | 773,000    |  
|                                         |                                                      |                                  |                                             |                                                                |         |                    |            |         
|CASH and CASH EQUIVALENTS, END OF PERIOD |                                                      | $                                | 770,000                                     |                                                                |         | $                  | 592,000    |         
|                                         |                                                      |                                  |                                             |                                                                |         |                    |            |         

See accompanying notes to consolidated financial statements

F-5



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##### 



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

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

|                            |                            |                                   |         |        |  |         |            |              |   |             |             |             |          |                  |          |               |         |                  |          |       |         |   |            |   |   |   |            |   |          |  
|--------------------------- | -------------------------- | --------------------------------- | ------- | ------ |  | ------- | ---------- | ------------ | - | ----------- | ----------- | ----------- | -------- | ---------------- | -------- | ------------- | ------- | ---------------- | -------- | ----- | ------- | - | ---------- | - | - | - | ---------- | - | -------- | -
|                            |                            |                                   |         |        |  |         |            |              |   |             |             | Retained    |          |                  |          |               |         | Unrealized Gains |          |       |         |   |            |   |   |  
|                            |                            |                                   |         |        |  |         |            | Additional   |   | Earnings    |             | Cumulative  |          | (Losses) on Debt |          |               |         |                  |          | Total
|                            |                            |                                   |         | Common |  | Paid-In |            | (Accumulated |   | Translation |             | and Equity  |          | Treasury         |          | Stockholders
|                            |                            |                                   |         | Stock  |  | Capital |            | Deficit)     |   | Adjustment  |             | Investments |          | Stock            |          | Equity       
|                            |                            |                                   |         |        |  |         |            |              |   |             |             |             |          |                  |          |              
|Balance, June 30, 2001      |                            | $                                 | 157,000 |        |  | $       | 28,333,000 |              |   | $           | (9,367,000  | )           |          | $                | (455,000 | )             |         | $                | (107,000 | )     |         | $ | (2,047,000 | ) |   | $ | 16,514,000 |  
|                            |                            |                                   |         |        |  |         |            |              |   |             |             |             |          |                  |          |               |         |                  |          |       |         |   |            |   |   |   |            |  
|                            |                            | First quarter 2002 net loss       |         |        |  |         |            |              |   |             |             |             | (881,000 | )                |          |               |         |                  |          |       |         |   |            |   |   |   |            |   | (881,000 | )
|                            | Other Comprehensive Income |                                   |         |        |  |         |            |              |   |             |             |             |          |                  |          |               |         |                  |          |       |         |   |            |   |   |   |            |   |         
|                            |                            | Unrealized gain on debt and       |         |        |  |         |            |              |   |             |             |             |          |                  |          |               |         |                  |          |       |         |   |            |   |  |   |            |   |         |  
|                            |                            | equity investments                |         |        |  |         |            |              |   |             |             |             |          |                  |          |               |         |                  |          |       | 112,000 |   |            |   |   |   |            |   | 112,000  |  
|                            |                            | Translation adjustment            |         |        |  |         |            |              |  |             |             |             |          |                  |          |               | 386,000 |                  |          |       |         |   |            |   |   |   |            |   | 386,000  |  
|                            |                            | Other Comprehensive Income/(Loss) |         |        |  |         |            |              |   |             |             |             |          |                  |          |               |         |                  |          |       |         |   |            |   |   |   |            |   | 498,000  |  
|                            |                            |                                   |         |        |  |         |            |              |   |             |             |             |          |                  |          |               |         |                  |          |       |         |   |            |   |   |   |            |  
|Comprehensive Income/(Loss) |                            |                                   |         |        |  |         |            |              |   |             |             |             |          |                  |          |               |         |                  |          |       |         |   |            |   |   |   | (383,000   | )
|                            |                            |                                   |         |        |  |         |            |              |   |             |             |             |          |                  |          |               |         |                  |          |       |         |   |            |   |   |   |            |  
|Balance, September 22, 2001 |                            | $                                 | 157,000 |        |  | $       | 28,333,000 |              |   | $           | (10,248,000 | )           |          | $                | (69,000  | )             |         | $                | 5,000    |       |         | $ | (2,047,000 | ) |   | $ | 16,131,000 |  
|                            |                            |                                   |         |        |  |         |            |              |   |             |             |             |          |                  |          |               |         |                  |          |       |         |   |            |   |   |   |            |  

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 2003 and 2002 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. 21, |           | June 29,
|                                      |  | 2002      |           | 2002    
|                                      |  |           |           |         
|Raw materials                         |  | $         | 1,194,000 |          |  | $ | 1,207,000 |  
|Frozen product & other finished goods |  |           | 2,976,000 |          |  |   | 3,252,000 |  
|Packing materials & supplies          |  |           | 485,000   |          |  |   | 464,000   |  
|                                      |  |           |           |          |  |   |           |  
|                                      |  |           | 4,655,000 |          |  |   | 4,923,000 |  
|Less obsolescence reserve             |  |           | (348,000  | )        |  |   | (504,000  | )
|                                      |  |           |           |          |  |   |           |  
|                                      |  | $         | 4,307,000 |          |  | $ | 4,419,000 |  
|                                      |  |           |           |          |  |   |           |  

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

During fiscal 1999, the Company became a partner in a limited liability
company with a Brazilian partner, Sanoli Indsutria E Commercio Alimentacao
Ltda, which has built a manufacturing facility and is

7



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marketing product in the Mercusor market. Cuisine Solutions Inc. owns 39%
of this Brazilian joint venture. The Company contributed technology to the
partnership in lieu of a cash contribution. The Company performs management
services to assist with the design and construction of the manufacturing
facility as well as ongoing management service for operations, research and
development, marketing and administrative support.

The Companys investment in Cuisine Solutions do Brasil Ltda consisted of
advances, Accounts Receivables for services performed and a loan in the amount
of $763,000 that has been granted to the Joint Venture Partner during the
second quarter of 2001. The loan bears interest at the London Interbank Offered
Rate (LIBOR) plus spread accepted by the Central Bank of Brazil at the time
of repayment. The loan must be repaid within one year with the option to
convert it into equity and controlling interest of the Brazilian Company. The
loan is in default as at September 21, 2002.

Due to the continued lack of cooperation from the Brazilian partner, the
inability to obtain any financial disclosures and the Joint Venture Partners
termination of Cuisine Solutions Inc. business activity in Brazil, Cuisine
Solutions, Inc has written off 100% of its investment in Brazil through the end
of fiscal year 2002.

The Company filed a civil lawsuit in the Federal District Court of
Brasilia against the controlling partner in the joint venture, Cuisine
Solutions do Brasil Ltda, as a result of the Brazilian partners failure to
disclose financial information and operating results of Cuisine Solutions do
Brasil Ltda to Cuisine Solutions Inc. according to both the joint venture
agreement and Brazilian law. The Company claims full recovery of the amounts
owed by Cuisine Solutions do Brasil Ltda, including the loan of $763,000, and
in addition the management and administrative fees of approximately $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
early stage of the filed lawsuit, management cannot predict a judgment from
this lawsuit before the end of fiscal year 2003.

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 has not been closed as
the details of the transaction have not been finalized.

The Company has receivables of $7,000 due as at September 21, 2002 from
Classic European Bakers, LLC (CEB). CEB is a related entity to FRC. The
receivables are primarily associated to unpaid rent related to a rental
agreement for office space used by CEB at the Companys premises in Alexandria.

7) Statement Re Computation of Per Share Earnings

Basic net income (loss) per common share is computed by dividing net
earnings (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 1,680,375.
For the periods ended September 21, 2002, and September 21, 2001, the assumed
exercise of the Companys outstanding stock options are not included in the
calculation as the effect would be anti-dilutive.

8



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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 $774,000 for the first
quarter of fiscal 2003 compared to a net loss of $881,000 a year ago. The
decrease in the loss was driven by a 20% reduction in selling and
administration cost as well as due to the improved non-operating result which
included in last years first quarter result a loss in equity from the
investment in Brazil in the amount of $120,000.
Revenue in the first quarter 2003 decreased from $7,335,000 to $6,423,000, a
12.4% decrease compared to the previous year primarily due to a sales decline
in the core sales channel On Board Services. The decline was driven by
temporary cost saving programs of large customers, specifically by the
airlines, which had a dramatic impact on the Companys sales after the
terrorist attacks in the USA in addition to the slowdown in the economy. The
return of sales to the airline industry to levels before September 11, 2001
have not been achieved since business travel is still limited and below the
volume of previous years. However, new menus and products have been developed
to replace the high price items in the first and business class and the Company
is alternating its strategy to be more competitive in this business
environment. Although the airline industry does continue to cut back, many of
the cuts involve short airline routes on non-meal shuttle flights. In addition,
Management believes the associated travel industry headcount reduction may
increase the dependency on prepared meal solutions due to the flexibility and
reduced need for labor when using Cuisine Solutions pre-prepared meals.
Management is also placing additional emphasis on retail sales for the holiday
season as well as on the military business.

NET SALES

First quarter 2003 revenue of $6,423,000 decreased as described above by
12.4% compared to previous years first quarter revenue of $7,335,000.

|                            |  |                |           |                |  |         |           |         |  |   |            |   |  |  |       |   
|--------------------------- |  | -------------- | --------- | -------------- |  | ------- | --------- | ------- |  | - | ---------- | - |  |  | ----- | --
|                            |  | Q1 Fiscal 2003 |           | Q1 Fiscal 2002 |  | $Change |           | %Change
|                            |  |                |           |                |  |         |           |        
|USA                         |  | $              | 3,941,000 |                |  | $       | 4,992,000 |         |  | $ | (1,051,000 | ) |  |  | (21.1 | %)
|Norway                      |  |                | 490,000   |                |  |         | 176,000   |         |  |   | 314,000    |   |  |  | 178.4 | % 
|France                      |  |                | 1,992,000 |                |  |         | 2,167,000 |         |  |   | (175,000   | ) |  |  | (8.1  | %)
|                            |  |                |           |                |  |         |           |         |  |   |            |   |  |  |       |   
|Total Product Sales Revenue |  | $              | 6,423,000 |                |  | $       | 7,335,000 |         |  | $ | (912,000   | ) |  |  | (12.4 | %)
|                            |  |                |           |                |  |         |           |         |  |   |            |   |  |  |       |   

USA SALES

Fiscal year 2003 first quarter sales in the USA decreased $1,051,000 to
$3,941,000, a 21.1% decrease from the previous year first quarter sales of
$4,992,000.

9



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Cuisine Solutions USA Fiscal Year 2003 first quarter sales by sales
channel:

|                  |  |         |           |         |  |         |           |         |  |   |            |   |  |  |       |   
|----------------- |  | ------- | --------- | ------- |  | ------- | --------- | ------- |  | - | ---------- | - |  |  | ----- | --
|                  |  | Q1 FY03 |           | Q1 FY02 |  | $Change |           | %Change
|                  |  |         |           |         |  |         |           |        
|Food Service      |  | $       | 999,000   |         |  | $       | 1,494,000 |         |  | $ | (495,000   | ) |  |  | (33.1 | %)
|On Board Services |  |         | 2,248,000 |         |  |         | 2,616,000 |         |  |   | (368,000   | ) |  |  | (14.1 | %)
|Retail            |  |         | 230,000   |         |  |         | 34,000    |         |  |   | 196,000    |   |  |  | 576.5 | % 
|Military          |  |         | 241,000   |         |  |         | 724,000   |         |  |   | (483,000   | ) |  |  | (66.7 | %)
|New Business      |  |         | 223,000   |         |  |         | 124,000   |         |  |   | 99,000     |   |  |  | 79.8  | % 
|                  |  |         |           |         |  |         |           |         |  |   |            |   |  |  |       |   
|Total             |  | $       | 3,941,000 |         |  | $       | 4,992,000 |         |  | $ | (1,051,000 | ) |  |  | (21.1 | %)
|                  |  |         |           |         |  |         |           |         |  |   |            |   |  |  |       |   

First quarter fiscal 2003 sales to the USA Foodservice channel decreased
significantly 33.1% in the USA to $999,000 from the previous year first quarter
sales of $1,494,000. The decrease was driven by decreased sales to hotels and
convention centers since occupancy rates were very low and businesses did not
hold as many large banquet events compared to the previous year. Management had
to respond to the low sales volume after the slowdown of the travel industry
with a reduction of sales personnel at the end of fiscal year 2002 which
resulted in a decrease of direct selling expenses. Gross margins have increased
for the quarter and accentuated by the decrease of related sales and marketing
expenses which resulted in higher contribution margins. The Foodservice channel
provides the highest gross margins to the Company after the successful
reorganization in order to focus sales efforts on key accounts, large events,
and use distributors to manage lower volume opportunities. The improved gross
margins for this channel resulted from better management of the product mix and
cost reduction as well as through improvements in distribution management and
related costs. 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 to initiate
aggressive cost reduction programs and product line changes to meet the
changing needs of the industry.

Fiscal 2003 first quarter sales to the On Board services channel totaled
$2,248,000 versus previous year first quarter sales of $2,616,000, a decrease
of $368,000 or 14.1%. Sales to the On Board Services sales are on a lower level
compared to previous years since the airline industry is still cutting back.
Management is experiencing a slow return to volumes of previous years and 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 2003 increased $196,000 to
$230,000 from $34,000 during the same period of the previous year due to the
initial product roll-out of a premium frozen food project to a North-American
retailer. The Company had further promising presentations to North American
retailers during the first quarter of fiscal 2003 for the premium packaged
frozen food products and anticipates product rollouts during the second quarter
through the fourth quarter of fiscal year 2003. Cuisine Solutions France has
also placed premium private label products successfully into the French retail
industry, an industry that is experiencing a significant increase in frozen
food sales versus the traditional demand for fresh products.

Military sales for the first quarter 2003 decreased $483,000 or 66.7% to
$241,000 from $724,000 during the same period in fiscal 2002 due to fluctuating
changes in order patterns from navy carriers. Military sales continue to be
managed successfully via a broker/distributor adding very little in terms of
sales and administrative expenses. The Company will further support the growing
opportunity for this sales

10



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channel as the military faces new challenges to attract and retain personnel
and the demands for ethnic and special foods continue to increase within the
military.

New Business sales for the first quarter of fiscal year 2003 amounted to
$223,000, up from $124,000 in fiscal 2002. The sales increase of $99,000 is
attributed to increased sales to national restaurant chains as well as to the
sales through the FIVELEAF web site. The Company will continue with further
penetration of product sales to national restaurant chains with entrees and
special meals such as vegetarian dishes throughout fiscal year 2003.

NORWAY SALES

During the first quarter of fiscal 2003, total Norwegian sales volume
decreased 36.6% to 6,572,000 Norwegian Kroner from 10,373,000 Norwegian Kroner
during the first quarter of fiscal 2002. The sales amount converted to US
dollars amounted to $872,000 in the first quarter of fiscal 2003 and $1,150,000
during the first quarter of fiscal 2002 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. The customer portfolio of Cuisine Solutions Norway sales has been changed
to a majority of third party sales during the first quarter of fiscal 2003 due
to the fact of the decreased demand of the Norway product line after the
slowdown of the economy in the USA. Inter-company sales to the USA and France
account for 43.8% compared to 84.7% during the same period in the previous
fiscal year. Total production and inter-company sales measured in Norwegian
Kroner were down 67% during the first quarter of fiscal 2003 versus the same
period in the previous year. Total Norwegian sales before inter-company
eliminations in both US dollars and Norwegian Kroners were as follows:

|                           |  |                 |           |                 |  |         |            |         |  |  |            |   |  |  |       |   
|-------------------------- |  | --------------- | --------- | --------------- |  | ------- | ---------- | ------- |  |  | ---------- | - |  |  | ----- | --
|                           |  | Fiscal 2003     |           | Fiscal 2002     |  |         |            |         |  |  |            |  
|                           |  | Norway Q1 Sales |           | Norway Q1 Sales |  | $Change |            | %Change
|                           |  |                 |           |                 |  |         |            |        
|Sales in US Dollars        |  |                 | 872,000   |                 |  |         | 1,150,000  |         |  |  | (278,000   | ) |  |  | (24.2 | %)
|Sales in Norwegian Kroners |  |                 | 6,572,000 |                 |  |         | 10,373,000 |         |  |  | (3,801,000 | ) |  |  | (36.6 | %)
|Average Exchange Rate      |  |                 | 7.537     |                 |  |         | 9.020      |         |  |  |            |   |  |  |       |   

Cuisine Solutions anticipates an increase in retail sales of salmon in the
second quarter of fiscal year 2003 due to the seasonal increase in demand.

FRANCE SALES

The total fiscal year 2003 first quarter sales in US dollars were
$1,992,000 versus previous year sales of $2,167,000, a decrease of $175,000 or
8.1%. Sales in EURO during the same period were EURO 2,024,000 versus EURO
2,441,000 respectively, a decrease of 17.1%. The differences in the decrease
are due to the US dollar-EURO fluctuations in the exchange rate for the
respective periods.

Cuisine Solutions France fiscal year 2003 first quarter sales compared to
prior year first quarter and respective exchange rates are as follows:

|                      |  |                 |           |                 |  |         |           |         |  |  |          |   |  |  |       |   
|--------------------- |  | --------------- | --------- | --------------- |  | ------- | --------- | ------- |  |  | -------- | - |  |  | ----- | --
|                      |  | Fiscal 2003     |           | Fiscal 2002     |  |         |           |         |  |  |          |  
|                      |  | France Q1 Sales |           | France Q1 Sales |  | $Change |           | %Change
|                      |  |                 |           |                 |  |         |           |        
|Sales in US Dollars   |  |                 | 1,992,000 |                 |  |         | 2,167,000 |         |  |  | (175,000 | ) |  |  | (8.1  | %)
|Sales in EURO         |  |                 | 2,024,000 |                 |  |         | 2,441,000 |         |  |  | (417,000 | ) |  |  | (17.1 | %)
|Average Exchange Rate |  |                 | 1.017     |                 |  |         | 1.126     |         |  |  |          |   |  |  |       |   

11



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Cuisine Solutions France decrease in sales was primarily driven by lower
retail sales of private label packaged products as well as lower sales in the
foodservice sector. Cuisine Solutions France does experience increased
competition from other sous vide companies in the retail sector. The decrease
in sales from the foodservice sector is considered temporarily due to the
current decline in the travel industry. However, 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.

BRAZIL

Cuisine Solutions Inc. owns 39% of a joint venture with a Brazilian
partner, Sanoli Indsutria E Commercio Alimentacao Ltda., which has built a
manufacturing facility and market product in the Mercusor market. The Company
contributed technology to the partnership in lieu of a cash contribution. The
Company performed management services to assist with the design and
construction of the manufacturing facility as well as ongoing management
service for operations, research and development, marketing and administrative
support. No management income was earned during the first quarter of fiscal
2003.

The Companys investment in Cuisine Solutions do Brasil Ltda consisted of
advances, Accounts Receivables for services performed and a loan in the amount
of $763,000 that has been granted to the Joint Venture Partner during the
second quarter of 2001. The loan bears interest at the London Interbank Offered
Rate (LIBOR) plus spread accepted by the Central Bank of Brazil at the time
of repayment. The loan had to be repaid within one year with the option to
convert it into equity and controlling interest of the Brazilian Company. The
loan is in default as at September 21, 2002.

Due to the continued lack of cooperation from the Brazilian partner, the
inability to obtain any financial disclosures and the Joint Venture Partners
termination of Cuisine Solutions Inc. business activity in Brazil, Cuisine
Solutions, Inc has written off 100% of its investment in Brazil through the end
of fiscal year 2002.

The Company filed a civil lawsuit in the Federal District Court of
Brasilia against the controlling partner in the joint venture, Cuisine
Solutions do Brasil Ltda, as a result of the Brazilian partners failure to
disclose financial information and operating results of Cuisine Solutions do
Brasil Ltda to Cuisine Solutions Inc. according to both the joint venture
agreement and Brazilian law. The Company claims full recovery of the amounts
owed by Cuisine Solutions do Brasil Ltda, including the loan of $763,000, and
in addition the management and administrative fees of approximately $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
early stage of the filed lawsuit, management cannot predict a judgement from
this lawsuit before the end of fiscal year 2003.

12



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GROSS MARGINS

|                        |  |                        |       |          |  |   |       |  
|----------------------- |  | ---------------------- | ----- | -------- |  | - | ----- | -
|                        |  | Quarter Ended         
|                        |  |                       
|                        |  | Sep. 21,               |       | Sep. 22,
|                        |  | 2002                   |       | 2001    
|                        |  |                        |       |         
|                        |  | (dollars in thousands)
|Net sales               |  | $                      | 6,423 |          |  | $ | 7,335 |  
|Gross margin percentage |  |                        | 17.1  | %        |  |   | 21.0  | %
|Loss from operations    |  | $                      | (750  | )        |  |   | (730  | )

Gross margins decreased overall due to lower production volumes and fixed
overhead cost resulting in higher cost of goods. Management has cut back on
production to reduce the inventories as well as initiated large scale cut back
to reduce operating expenses without impairing the Company to grow when demand
grows.

Gross margins in the USA and France are actually up by 2% and 3%
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 2003.

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. 21,               |       | Sep. 22,
|                                 |  | 2002                   |       | 2001    
|                                 |  |                        |       |         
|                                 |  | (dollars in thousands)
|Selling and administrative costs |  | $                      | 1,715 |          |  | $ | 2,150 | 

Selling and administrative expenses decreased $435,000 in the first
quarter of fiscal 2003 versus the first quarter of fiscal 2002. Expenses as a
percent of sales were 26.7% in the first quarter of fiscal 2003 versus 29.3% in
fiscal 2002. The decrease was due to the aggressive cost management and
attributed to the reduction of sales and administrative staff as well as
compensation plans tied up to top line sales and profit contribution.
Management does continue tight management of selling and administrative
expenses and expects continued reduction for the balance of fiscal year 2003.

Depreciation and Amortization

Depreciation and amortization decreased $13,000 to $250,000 for the first
quarter of fiscal year 2003, compared with $263,000 for the same period a year
ago. This decrease is related to equipment reaching its useful life and
correspondingly has been fully depreciated.

13



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Non-operating Income and Expense

Investment income consists of returns earned on funds invested in
corporate bonds and treasury bills. Management maintains these funds in a trust
account with the majority of the funds invested in government securities.

Interest expense relates to the borrowings relating to the Companys U.S.,
Norwegian subsidiary including the Norwegian capital lease and the French
subsidiary. At September 21, 2002, the Company had borrowings of approximately
$2,905,000, bearing interest at rates ranging from 5.6 % to 9.5%. The majority
of these borrowings of $2,508,000 was through its Norwegian subsidiary and
includes an outstanding principal amount of $1,138,000 for the capital lease on
the building in Norway and $1,248,000 in a working capital line of credit.
Cuisine Solutions France also has a remaining principal balance on a term loan
in the amount of $119,000 at 5.6% obtained to finance a plant expansion and
elimination of factoring. The original loan amount equated to approximately
$500,000 in September 1998. The current portion of this loan is $108,000, and
loan is due September 2003. Additionally, Cuisine Solutions France entered in
December 2000 into a five-year capital lease obligation for a cooking machine
with an initial principal amount of $428,000 and 6% p.a. interest on the
outstanding balance of the loan. The current portion of this loan is $98,000
and the total outstanding principal amounts to $279,000 at September 21, 2002.

Provision for Taxes

No provision for income taxes was made during the first quarter of fiscal
2003.

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 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 previous fiscal year the sales to Airline accounts were
approximately 38% of total revenues and sales to the Foodservice Industry 33%,
primarily to hotel restaurant 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.

14



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##### 



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.

Liquidity and Capital Resources

At September 21, 2002, the Companys combined total of cash and short-term
investment balances was $770,000, compared with $1,958,000 at June 29, 2002.
This decrease is the result of the operating loss, the increase in other assets
and decrease in accounts payable and accruals. Additionally, the Company held
long term investments of $2,565,000 and $2,608,000 at September 21, 2002 and
June 29, 2002, respectively, with maturities greater than one year. Long term
investments do include US Treasury Notes of which 900,000 bonds with a current
market value of $1,019,250 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 2003 first
quarter.

Net cash used by operations amounted to $1,120,000 for year to date 2003,
compared to cash provided of $224,000 a year ago. Cash in the amount of $49,000
was used by investing activities, largely due to the investment in new
equipment in the USA. Cash in the amount of $19,000 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 21, 2002, $1,248,000 was outstanding under this
overdraft facility. The maximum amount available under line of credit is
currently $1,332,000.

Future Prospects

Marketing Efforts

In fiscal year 2003, 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. Subsequent to the end of the
first quarter of fiscal 2003, Management has secured an quarterly agreement
with a major airline as a result of presenting a value price high quality
product line along with the international presence of the Company. The further
product roll out of the retail packaged product line under the Cuisine
Solutions Brand is planned during the second quarter. The Company also plans to
expand its in-store deli program with the existing as well as new accounts.

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 2003 strategy involves the continued penetration into large
key national accounts, banquet centers and casinos. Demand for foodservice
product in France increased significantly during fiscal 2002 and expects
further growth for fiscal 2003 due to the continued customer satisfaction with
the quality and variety of product offered by Cuisine Solutions France.
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 new 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 believes this
value increases in the current economic situation challenging todays business
environment. In the meantime, Management has and will continue with aggressive
cost reduction programs and product line changes to meet the changing needs of
the industry.

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On Board Services

On Board Services was highly affected by the recent slowdown of the travel
industry. Cuisine Solutions plans to continue with the sales strategy to return
to sales growth by a continued push for new USA accounts and a new focus on the
European airline market. As the airline and related support industries
consolidate their workforce, Management will explore every opportunity to make
Cuisine Solutions product available to the industry to allow airlines to
continue to provide high quality first class and business class meals, but with
greater flexibility and less labor using the Cuisine Solutions product line.

Retail

Retail objectives for fiscal year 2003 include the further penetration
into the USA in-store deli of targeted retailers as well as the completion of
the 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 provide increase the efficiency of the total
Company product line.

France

Cuisine Solutions France has experienced significant growth during the
last three years and contributed with its profits to the Companys cash flow
since the acquisition by Cuisine Solutions in 1999. Management will continue
with its strategic sales plan to expand the selling efforts not only to France
but as well as to other European countries, especially 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 for the delivery a
positive net income in France.

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

Brazil

The largest and newest facility, Cuisine Solutions Brazil, managed under a
joint venture agreement, has been designed to handle large volume demand as
well as for expandability to meet future additional volume requirements. The
Brazilian facility initiated production at the end of fiscal year 2001 for test
marketing the retail product line in Brazil. The facility also received
approval from the European Community in May 2001, an approval that requires
strict quality control measures in order to have the approval to ship product
to Europe. It was Cuisine Solutions intent to take advantage of the lower cost
of poultry, beef and pork in Brazil, and ship product to the European market.
However, this venture was terminated by the Brazilian Partner during fiscal
year 2002. Management is in negotiations for repayment of the Companys
investment and has filed a civil lawsuit in the Federal District Court of
Brasilia against the Brazilian partner due to the continued lack of cooperation
from the Brazilian partner, the inability to obtain any financial disclosures
and the Joint Venture Partners termination of Cuisine Solutions Inc. business
activity in Brazil. Due to the early stage of the filed lawsuit, management
cannot predict a judgement from this lawsuit and a final solution to recover
its investment before the end of fiscal year 2003.

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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 38% of the
Companys sales. The net assets of the subsidiaries are approximately 35% 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
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 under limited budgets and resources.

Item 4. Controls and Procedures

Within 90 days prior to 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.

The Company filed a civil lawsuit in the Federal District Court of
Brasilia against the controlling partner in the joint venture, Cuisine
Solutions do Brasil Ltda, as a result of the Brazilian partners failure to
disclose financial information and operating results of Cuisine Solutions do
Brasil Ltda to Cuisine Solutions Inc. according to both the joint venture
agreement and Brazilian law. Due to the early stage of the filed lawsuit,
management cannot predict a judgement from this lawsuit before the end of
fiscal year 2003.

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 19th annual meeting of shareholders was held on October 22,
2002 in Dulles, Virginia at the Dulles Airport Marriott Hotel. 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, Mr. David Jordan, Mr. Robert van Roijen and Mr. Robert Murphy (Vice
President & COO).

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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 1, 2002 |  | By:/s/Stanislas Vilgrain
      Stanislas Vilgrain
      President and CEO                                           
|                     
|                      |  | By:/s/Robert Murphy
      Robert Murphy
      Vice President and
      Chief Operating Officer                      
|                     
|                      |  | By:/s/Andreas Pfann
      Andreas Pfann
      Chief Financial Officer,
      Treasurer and
      Corporate Secretary

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Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

I, Stanislas Vilgrain, certify that:

1.     I have reviewed this report on Form 10-Q of Cuisine Solutions, Inc.;

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

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

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

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

Date: November 1, 2002

|                                                                                                             
|-------------------------------------------------------------------------------------------------------------
|/s/ Stanislas Vilgrain
Stanislas Vilgrain
President
and Chief Executive Officer
(Principal Executive Officer)

20



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I, Robert Murphy, certify that:

1.     I have reviewed this report on Form 10-Q of Cuisine Solutions, Inc.;

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

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

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

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

Date: November 1, 2002

|                                                                                    
|------------------------------------------------------------------------------------
|/s/ Robert Murphy
Robert Murphy
Director, Vice President and
Chief Operating Officer

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I, Andreas Pfann, certify that:

1.     I have reviewed this report on Form 10-Q of Cuisine Solutions, Inc.;

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

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

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

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

Date: November 1, 2002

|                                                                                                                                        
|----------------------------------------------------------------------------------------------------------------------------------------
|/s/ Andreas Pfann
Andreas Pfann
Chief Financial Officer, Treasurer
and Corporate Secretary
(Principal Financial and Accounting Official)

22