##### 



Form 10-Q
 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended April 1, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-32439
 CUISINE SOLUTIONS, INC.
  DELAWARE
    
    52-0948383(State of other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification Number)
 85 S Bragg Street, Suite 600, Alexandria, VA 22312
 (703) 270-2900
  Yes þ No o
  o o þ
  Yes o No þ
   Class of Common Stock
    
    Number of SharesClass A
    
    16,412,941Class B
    
    None




---



##### 



TABLE OF CONTENTS
 PART IItem 1.
    
    Financial Statements (unaudited)
    
    page   3Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    page 14Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    page 27Item 4.
    
    Controls and Procedures
    
    page 28PART IIItem 1.
    
    Legal Proceedings
    
    page 29Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    page 29Item 3.
    
    Defaults Upon Senior Securities
    
    page 29Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    page 29Item 5.
    
    Other Information
    
    page 29Item 6.
    
    Exhibits
    
    page 29SIGNATURES
    
    page 30EX-31.1:
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
    
    page 31EX-31.2:
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
    
    page 32EX-32.1:
    
    Certification  of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of  2002
    
    page 33
 2




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##### 



CUISINE SOLUTIONS, INC.
 PART I: FINANCIAL INFORMATION
 Item 1. Financial Statements (unaudited)
 CUISINE SOLUTIONS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
 April 1,
    
    
    June 25,2006
    
    
    2005ASSETSCurrent assetsCash and cash equivalents
    
    $
    501,000
    
    
    $
    2,171,000Accounts receivable, trade
    
    
    5,365,000
    
    
    
    3,758,000Inventory
    
    
    9,023,000
    
    
    
    6,929,000Prepaid expenses
    
    
    627,000
    
    
    
    344,000Related party receivables, current
    
    
    27,000
    
    
    
    94,000Other current assets
    
    
    168,000
    
    
    
    255,000Assets held for disposal from discontinued operations
    
    
    8,000
    
    
    
    39,000TOTAL CURRENT ASSETS
    
    
    15,719,000
    
    
    
    13,590,000Investments, non current
    
    
    985,000
    
    
    
    1,465,000Fixed assets, net
    
    
    5,426,000
    
    
    
    3,885,000Other assets
    
    
    75,000
    
    
    
    46,000TOTAL ASSETS
    
    $
    22,205,000
    
    
    $
    18,986,000LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesLine-of-credit
    
    $
    1,000,000
    
    
    $
    1,774,000Current portion of long-term debt
    
    
    308,000
    
    
    
    422,000Accounts payable and accrued expenses
    
    
    5,107,000
    
    
    
    4,227,000Accrued payroll and related liabilities
    
    
    2,083,000
    
    
    
    1,631,000Liabilities from discontinued operations
    
    
    147,000
    
    
    
    1,200,000Total current liabilities
    
    
    8,645,000
    
    
    
    9,254,000Long-term debt, less current portion
    
    
    1,286,000
    
    
    
    1,081,000TOTAL LIABILITIES
    
    
    9,931,000
    
    
    
    10,335,000Commitments and contingenciesStockholders equityCommon StockClass A Stock  $.01 par value, 20,000,000 shares authorized, 16,412,941 and 16,073,288
shares issued and outstanding at April 1, 2006 and June 25, 2005, respectively
    
    
    164,000
    
    
    
    161,000Class B Stock  $.01 par value, 175,000 shares authorized, none issued
    
    
    
    
    
    
    Additional paid-in capital
    
    
    27,402,000
    
    
    
    26,754,000Accumulated deficit
    
    
    (15,813,000
    )
    
    
    (18,781,000
    )Accumulated Other Comprehensive IncomeUnrealized loss on debt and equity investments
    
    
    (26,000
    )
    
    
    (7,000
    )Cumulative translation adjustment
    
    
    547,000
    
    
    
    524,000TOTAL STOCKHOLDERS EQUITY
    
    
    12,274,000
    
    
    
    8,651,000TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    22,205,000
    
    
    $
    18,986,000
  3




---



##### 





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


Sixteen Weeks Ended
    
    
    Forty Weeks EndedApril 1,
    
    
    April 2,
    
    
    April 1,
    
    
    April 2,2006
    
    
    2005
    
    
    2006
    
    
    2005Net sales
    
    $
    17,968,000
    
    
    $
    14,355,000
    
    
    $
    49,314,000
    
    
    $
    34,120,000Cost of goods sold
    
    
    13,404,000
    
    
    
    10,553,000
    
    
    
    36,390,000
    
    
    
    25,292,000Gross margin
    
    
    4,564,000
    
    
    
    3,802,000
    
    
    
    12,924,000
    
    
    
    8,828,000Selling and administration
    
    
    3,743,000
    
    
    
    3,077,000
    
    
    
    9,491,000
    
    
    
    7,020,000Depreciation and amortization
    
    
    124,000
    
    
    
    158,000
    
    
    
    368,000
    
    
    
    370,000Income from operations
    
    
    697,000
    
    
    
    567,000
    
    
    
    3,065,000
    
    
    
    1,438,000Nonoperating income (expense)Investment income
    
    
    5,000
    
    
    
    19,000
    
    
    
    39,000
    
    
    
    47,000Interest expense
    
    
    (31,000
    )
    
    
    (49,000
    )
    
    
    (105,000
    )
    
    
    (118,000
    )Other income (expense)
    
    
    (6,000
    )
    
    
    (26,000
    )
    
    
    (17,000
    )
    
    
    (44,000
    )Total non-operating expense
    
    
    (32,000
    )
    
    
    (56,000
    )
    
    
    (83,000
    )
    
    
    (115,000
    )Income before income tax
    
    
    665,000
    
    
    
    511,000
    
    
    
    2,982,000
    
    
    
    1,323,000Provision for income tax benefit (expense)
    
    
    (6,000
    )
    
    
    
    
    
    
    (14,000
    )
    
    
    Income from continuing operations before discontinued operations
    
    
    659,000
    
    
    
    511,000
    
    
    
    2,968,000
    
    
    
    1,323,000Loss from discontinued operationsLoss from operations of CS Norway
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,000
    )Net loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,000
    )NET INCOME
    
    $
    659,000
    
    
    $
    511,000
    
    
    $
    2,968,000
    
    
    $
    1,266,000Basic and diluted net earnings per common share:Earnings from continuing operations before discontinued
operations per common share-basic
    
    $
    0.04
    
    
    $
    0.03
    
    
    $
    0.18
    
    
    $
    0.08Earnings from continuing operations before discontinued
operations per common share-diluted
    
    $
    0.04
    
    
    $
    0.03
    
    
    $
    0.16
    
    
    $
    0.08Loss from discontinued operations per common share-basic and
diluted
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Net earnings per common share-basic
    
    $
    0.04
    
    
    $
    0.03
    
    
    $
    0.18
    
    
    $
    0.08Net earnings per common share-diluted
    
    $
    0.04
    
    
    $
    0.03
    
    
    $
    0.16
    
    
    $
    0.07Weighted average shares outstanding-basic
    
    
    16,299,374
    
    
    
    15,947,547
    
    
    
    16,197,434
    
    
    
    15,909,930Common stock equivalents
    
    
    1,977,554
    
    
    
    1,772,690
    
    
    
    1,936,973
    
    
    
    1,506,989Weighted average shares outstanding-diluted
    
    
    18,276,928
    
    
    
    17,720,237
    
    
    
    18,134,407
    
    
    
    17,416,919


4




---



##### 





CUISINE SOLUTIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
(Unaudited)


Unrealized LossAdditional
    
    
    Accumulated
    
    
    on Debt
    
    
    Cumulative
    
    
    TotalCommon
    
    
    Paid-In
    
    
    Earnings/
    
    
    and Equity
    
    
    Translation
    
    
    StockholdersStock
    
    
    Capital
    
    
    (Deficit)
    
    
    Investments
    
    
    Adjustment
    
    
    EquityBalance, June 25, 2005
    
    $
    161,000
    
    
    $
    26,754,000
    
    
    $
    (18,781,000
    )
    
    $
    (7,000
    )
    
    $
    524,000
    
    
    $
    8,651,000Exercise of common stock options
    
    
    3,000
    
    
    
    383,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    386,000Stock-based compensation
    
    
    
    
    
    
    265,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    265,000Forty weeks 2006 net income
    
    
    
    
    
    
    
    
    
    
    2,968,000
    
    
    
    
    
    
    
    
    
    
    
    2,968,000Other Comprehensive incomeUnrealized loss on debt
and equity investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,000
    )
    
    
    
    
    
    
    (19,000
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,000
    
    
    
    23,000Other Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,000Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,972,000Balance, April 1, 2006
    
    $
    164,000
    
    
    $
    27,402,000
    
    
    $
    (15,813,000
    )
    
    $
    (26,000
    )
    
    $
    547,000
    
    
    $
    12,274,000


Unrealized Gain/Additional
    
    
    Accumulated
    
    
    (Loss) on Debt
    
    
    Cumulative
    
    
    TotalCommon
    
    
    Paid-In
    
    
    Earnings/
    
    
    and Equity
    
    
    Translation
    
    
    StockholdersStock
    
    
    Capital
    
    
    (Deficit)
    
    
    Investments
    
    
    Adjustment
    
    
    EquityBalance, June 26, 2004
    
    $
    159,000
    
    
    $
    26,380,000
    
    
    $
    (20,490,000
    )
    
    $
    17,000
    
    
    $
    506,000
    
    
    $
    6,572,000Exercise of common stock options
    
    
    1,000
    
    
    
    116,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117,000Stock-based compensation
    
    
    
    
    
    
    131,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    131,000Forty weeks 2005 net income
    
    
    
    
    
    
    
    
    
    
    1,266,000
    
    
    
    
    
    
    
    
    
    
    
    1,266,000Other Comprehensive IncomeUnrealized loss on debt
and equity investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,000
    )
    
    
    
    
    
    
    (20,000
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111,000
    
    
    
    111,000Other Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    91,000Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,357,000Balance, April 2, 2005
    
    $
    160,000
    
    
    $
    26,627,000
    
    
    $
    (19,224,000
    )
    
    $
    (3,000
    )
    
    $
    617,000
    
    
    $
    8,177,000




5



---



##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 Year to dateForty weeks endedApril 1,
    
    
    April 2,2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIESNet income from continuing operations
    
    $
    2,968,000
    
    
    $
    1,323,000Net loss from discontinued operations
    
    
    
    
    
    
    (57,000
    )Adjustments to reconcile net income to net cash provided by (used in) operating activitiesDepreciation and amortization
    
    
    652,000
    
    
    
    587,000Allowance for doubtful accounts
    
    
    137,000
    
    
    
    347,000Inventory obsolescence reserve
    
    
    118,000
    
    
    
    55,000Loss on investments
    
    
    5,000
    
    
    
    Stock based compensation
    
    
    265,000
    
    
    
    131,000Changes in assets and liabilities, net of effects of non-cash transactions:Increase in accounts receivable
    
    
    (1,744,000
    )
    
    
    (372,000
    )Increase in inventory
    
    
    (2,212,000
    )
    
    
    (2,779,000
    )Increase in prepaid expenses
    
    
    (283,000
    )
    
    
    (255,000
    )Decrease (increase) in related parties receivable
    
    
    67,000
    
    
    
    (28,000
    )Decrease (increase) in other assets
    
    
    58,000
    
    
    
    (114,000
    )Increase in accounts payable and accrued expenses
    
    
    810,000
    
    
    
    176,000Increase in accrued payroll and related liabilities
    
    
    452,000
    
    
    
    87,000Increase in other current liabilities
    
    
    70,000
    
    
    
    69,000Changes in assets and liabilities of discontinued operations
    
    
    9,000
    
    
    
    (201,000
    )Gain on disposal of asset from discontinued operation
    
    
    
    
    
    
    (571,000
    )Net cash provided by (used in) operating activities
    
    
    1,372,000
    
    
    
    (1,602,000
    )CASH FLOWS FROM INVESTING ACTIVITIESProceeds from investments
    
    
    456,000
    
    
    
    1,000Capital expenditures
    
    
    (2,193,000
    )
    
    
    (847,000
    )Net cash used in investing activities
    
    
    (1,737,000
    )
    
    
    (846,000
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments on debts
    
    
    (871,000
    )
    
    
    (589,000
    )Proceeds from debts
    
    
    962,000
    
    
    
    248,000Change in line of credit, net
    
    
    (774,000
    )
    
    
    2,074,000Payments on debts from discontinued operations
    
    
    (1,031,000
    )
    
    
    (5,000
    )Proceeds from stock issuance
    
    
    386,000
    
    
    
    117,000Net cash (used in) provided by financing activities
    
    
    (1,328,000
    )
    
    
    1,845,000Net decrease in cash and cash equivalents
    
    
    (1,693,000
    )
    
    
    (603,000
    )Change in cumulative translation adjustment
    
    
    23,000
    
    
    
    111,000Cash and cash equivalents, beginning of period
    
    
    2,171,000
    
    
    
    1,395,000CASH and CASH EQUIVALENTS, END OF PERIOD
    
    $
    501,000
    
    
    $
    903,000SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATIONCash paid during the period for interest
    
    $
    148,000
    
    
    $
    147,000Cash paid during the period for income taxes
    
    $
    20,000
    
    
    $
    19,000Assets acquired through capital lease
    
    $
    
    
    
    $
    15,000
  6




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##### 



Cuisine Solutions, Inc.
   NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    Nature of Operations
  Principles of Consolidation
  Revenue Recognition
 Revenue Recognition When Right of Return Exists
 7




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##### 



Customer Dependency
  Impairment of Long-Lived Assets and Long-Lived Assets To Be Disposed Of
  Foreign Currency Translation
  NOTE 2  FISCAL PERIODS
  NOTE 3  ACCOUNTS RECEIVABLE
  April 1, 2006
    
    
    June 25, 2005Trade accounts receivable
    
    $
    5,995,000
    
    
    $
    4,251,000Allowance for doubtful accounts
    
    
    (630,000
    )
    
    
    (493,000
    )Trade accounts receivable, net
    
    $
    5,365,000
    
    
    $
    3,758,000
  8




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##### 



NOTE 4  INVENTORY
    April 1, 2006
    
    
    June 25, 2005Raw materials
    
    $
    3,321,000
    
    
    $
    1,935,000Frozen product & other finished goods
    
    
    5,107,000
    
    
    
    4,337,000Packing materials & supplies
    
    
    1,101,000
    
    
    
    988,0009,529,000
    
    
    
    7,260,000Less obsolescence reserve
    
    
    (506,000
    )
    
    
    (331,000
    )$
    9,023,000
    
    
    $
    6,929,000
 NOTE 5  COMMITMENTS AND CONTINGENCIES
  NOTE 6  TRANSACTIONS WITH RELATED PARTIES
  9
         NOTE 7  DISCONTINUED OPERATIONS
   April 1, 2006
    
    
    June 25, 2005Assets of discontinued operations:Cash
    
    $
    3,000
    
    
    $
    36,000Accounts receivable, net
    
    
    
    
    
    
    Other assets
    
    
    5,000
    
    
    
    3,000Fixed assets
    
    
    
    
    
    
    Total assets of discontinued operations
    
    $
    8,000
    
    
    $
    39,000Liabilities of discontinued operations:Accounts payable and accrued liabilities
    
    $
    147,000
    
    
    $
    169,000Note payable
    
    
    
    
    
    
    1,031,000Total liabilities of discontinued operations
    
    $
    147,000
    
    
    $
    1,200,000
   10




---



##### 



Sixteen weeks ended
    
    Forty weeks endedApr. 1, 2006
    
    Apr. 2, 2005
    
    Apr. 1, 2006
    
    Apr. 2, 2005Net Sales
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    31,000Expenses:Cost of goods sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113,000Selling and administrative expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000Other operating expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    463,000Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83,000Other expense (income)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,000
    )Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (628,000
    )Gain from disposal of assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    571,000Net loss from discontinued operations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (57,000
    )
 NOTE 8  EARNINGS PER SHARE
  NOTE 9  ACCOUNTING FOR STOCK-BASED COMPENSATION
   11
          16 weeks ended
    
    40 weeks endedApril 2, 2005
    
    April 2, 2005Net income applicable to common shareholders
    
    $
    511,000
    
    
    $
    1,266,000Add: Stock-based employee compensation cost included in reported net income
    
    $
    47,000
    
    
    $
    131,000Less: Total stock-based compensation expense determined under the fair
value method
    
    $
    (224,000
    )
    
    $
    (482,000
    )Pro forma net income
    
    $
    334,000
    
    
    $
    915,000Earnings per common share:Basic  as reported
    
    $
    0.03
    
    
    $
    0.08Diluted  as reported
    
    $
    0.03
    
    
    $
    0.08Basic  pro forma
    
    $
    0.02
    
    
    $
    0.06Diluted  pro forma
    
    $
    0.02
    
    
    $
    0.06Weighted average common shares outstanding-basic
    
    
    15,947,547
    
    
    
    15,909,930Common stock equivalents
    
    
    1,772,690
    
    
    
    1,506,989Weighted average common shares outstanding-diluted
    
    
    17,720,237
    
    
    
    17,416,919
  Sixteen weeks ended
    
    
    Forty weeks endedApril 1, 2006
    
    
    April 1, 2006Weighted-
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted-Weighted-
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    Aggregate
    
    
    
    
    
    
    Average
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    Intrinsic
    
    
    
    
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Term
    
    
    value
    
    
    Shares
    
    
    Price
    
    
    Term
    
    
    valueOutstanding at beginning of
the periods
    
    
    2,677,176
    
    
    $
    1.02
    
    
    
    
    
    
    
    
    
    
    
    2,795,968
    
    
    $
    1.02Granted
    
    
    7,276
    
    
    $
    0.01
    
    
    
    
    
    
    
    
    
    
    
    18,034
    
    
    $
    0.01Exercised
    
    
    (210,103
    )
    
    $
    1.30
    
    
    
    
    
    
    
    
    
    
    
    (339,653
    )
    
    $
    1.14Forfeited or expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at April 1, 2006
    
    
    2,474,349
    
    
    $
    0.99
    
    
    
    5.7
    
    
    $
    488,000
    
    
    
    2,474,349
    
    
    $
    0.99
    
    
    
    5.7
    
    
    $
    488,000Exercisable at April 1, 2006
    
    
    2,194,461
    
    
    $
    0.99
    
    
    
    5.4
    
    
    $
    449,000
    
    
    
    2,194,461
    
    
    $
    0.99
    
    
    
    5.4
    
    
    $
    449,000
       NOTE 10  RECENT ACCOUNTING PRONOUNCEMENTS
   NOTE 11  SUBSEQUENT EVENT
 
  
 13
      Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  The following analysis of our financial condition and results of operations should be read in
conjunction with our financial statements and the notes thereto contained elsewhere in this report.
 BUSINESS OVERVIEW
    
    
    On Board Services: Airlines, Railroad and Cruise Lines
 
    
    Foodservice: Hotel banquets, Convention Centers, Sport Stadiums and other Special Events such as the Olympics
 
    
    Retail: Supermarket In-Store Deli, Premium packaged foods
 
    
    Military: Naval carriers, Army field feeding, and military dining halls and clubs
 
    
    National Restaurant Chains: Upscale multi-unit restaurants
 14
      CRITICAL ACCOUNTING ESTIMATES AND POLICIES
      RECENT ACCOUNTING PRONOUNCEMENTS
   15
      RESULTS OF OPERATIONS
 Comparison of the sixteen weeks ended April 1, 2006 to the sixteen weeks ended April 2, 2005
   Net Sales
  Q3 Fiscal 2006
    
    
    Q3 Fiscal 2005
    
    
    $ Change
    
    
    %ChangeUS
    
    $
    12,612,000
    
    
    $
    9,113,000
    
    
    $
    3,499,000
    
    
    
    38.4
    %France
    
    
    5,356,000
    
    
    
    5,242,000
    
    
    
    114,000
    
    
    
    2.2
    %Total Net Sales
    
    $
    17,968,000
    
    
    $
    14,355,000
    
    
    $
    3,613,000
    
    
    
    25.2
    %
  Q3 Fiscal 2006
    
    
    Q3 Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    3,290,000
    
    
    $
    3,471,000
    
    
    $
    (181,000
    )
    
    
    (5.2
    %)On Board Services
    
    
    5,000,000
    
    
    
    5,173,000
    
    
    
    (173,000
    )
    
    
    (3.3
    %)Retail
    
    
    5,191,000
    
    
    
    3,120,000
    
    
    
    2,071,000
    
    
    
    66.4
    %Military
    
    
    3,443,000
    
    
    
    2,015,000
    
    
    
    1,428,000
    
    
    
    70.9
    %National Restaurant
Chain / New
Business
    
    
    1,044,000
    
    
    
    576,000
    
    
    
    468,000
    
    
    
    81.3
    %Total
    
    $
    17,968,000
    
    
    $
    14,355,000
    
    
    $
    3,613,000
    
    
    
    25.2
    %
  16
      U.S. Sales
  Q3 Fiscal 2006
    
    
    Q3 Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    2,023,000
    
    
    $
    1,862,000
    
    
    $
    161,000
    
    
    
    8.6
    %On Board Services
    
    
    2,694,000
    
    
    
    3,284,000
    
    
    
    (590,000
    )
    
    
    (18.0
    %)Retail
    
    
    3,423,000
    
    
    
    1,387,000
    
    
    
    2,036,000
    
    
    
    146.8
    %Military
    
    
    3,443,000
    
    
    
    2,015,000
    
    
    
    1,428,000
    
    
    
    70.9
    %National Restaurant Chain
    
    
    1,029,000
    
    
    
    565,000
    
    
    
    464,000
    
    
    
    82.1
    %Total
    
    $
    12,612,000
    
    
    $
    9,113,000
    
    
    $
    3,499,000
    
    
    
    38.4
    %
       France Sales
  Q3 Fiscal 2006
    
    Q3 Fiscal 2005
    
    $ Change
    
    %ChangeSales in U.S. Dollars
    
    $
    5,356,000
    
    
    $
    5,242,000
    
    
    $
    114,000
    
    
    
    2.2
    %Sales in Euros
    
    
    4,465,000
    
    
    
    4,004,000
    
    
    
    461,000
    
    
    
    11.5
    %Average exchange rate
    
    
    0.834
    
    
    
    0.764
  
 17
      Q3 Fiscal 2006
    
    
    Q3 Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    1,267,000
    
    
    $
    1,609,000
    
    
    $
    (342,000
    )
    
    
    (21.3
    %)On Board Services
    
    
    2,306,000
    
    
    
    1,889,000
    
    
    
    417,000
    
    
    
    22.1
    %Retail
    
    
    1,768,000
    
    
    
    1,733,000
    
    
    
    35,000
    
    
    
    2.0
    %Others
    
    
    15,000
    
    
    
    11,000
    
    
    
    4,000
    
    
    
    36.4
    %Total
    
    $
    5,356,000
    
    
    $
    5,242,000
    
    
    $
    114,000
    
    
    
    2.2
    %
    Gross Margin
  Sixteen weeks endedApr. 1, 2006
    
    Apr. 2, 2005
    
    % Change(Dollars in thousands)Net sales
    
    $
    17,968
    
    
    $
    14,355
    
    
    
    25.2
    %Gross margin
    
    $
    4,564
    
    
    $
    3,802
    
    
    
    20.0
    %Gross margin percentage
    
    
    25.4
    %
    
    
    26.5
    %Income from continuing operations
    
    $
    659
    
    
    $
    511
    
    
    
    29.0
    %Net income
    
    $
    659
    
    
    $
    511
    
    
    
    29.0
    %
   Selling and Administrative Expenses
  18
      Q3 Fiscal 2006
    
    
    Q3 Fiscal 2005
    
    
    $ Change
    
    
    %ChangeUS
    
    $
    2,914,000
    
    
    $
    2,187,000
    
    
    $
    727,000
    
    
    
    33.2
    %France
    
    
    829,000
    
    
    
    890,000
    
    
    
    (61,000
    )
    
    
    (6.9
    %)Total SG&A Expense
    
    $
    3,743,000
    
    
    $
    3,077,000
    
    
    $
    666,000
    
    
    
    21.6
    %
  Depreciation and Amortization
  Non-operating Income and Expense from Continuing Operations
  Provision for Taxes
  19
      Comparison of the forty weeks ended April 1, 2006 to the forty weeks ended April 2, 2005
   Net Sales
  YTD Fiscal 2006
    
    
    YTD Fiscal 2005
    
    
    $ Change
    
    
    %ChangeUS
    
    $
    34,770,000
    
    
    $
    22,371,000
    
    
    $
    12,399,000
    
    
    
    55.4
    %France
    
    
    14,544,000
    
    
    
    11,749,000
    
    
    
    2,795,000
    
    
    
    23.8
    %Total Net Sales
    
    $
    49,314,000
    
    
    $
    34,120,000
    
    
    $
    15,194,000
    
    
    
    44.5
    %
  YTD Fiscal 2006
    
    
    YTD Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    9,719,000
    
    
    $
    8,511,000
    
    
    $
    1,208,000
    
    
    
    14.2
    %On Board Services
    
    
    12,750,000
    
    
    
    12,116,000
    
    
    
    634,000
    
    
    
    5.2
    %Retail
    
    
    12,628,000
    
    
    
    8,062,000
    
    
    
    4,566,000
    
    
    
    56.6
    %Military
    
    
    11,808,000
    
    
    
    4,000,000
    
    
    
    7,808,000
    
    
    
    195.2
    %National Restaurant
Chain / New
Business
    
    
    2,409,000
    
    
    
    1,431,000
    
    
    
    978,000
    
    
    
    68.3
    %Total
    
    $
    49,314,000
    
    
    $
    34,120,000
    
    
    $
    15,194,000
    
    
    
    44.5
    %
  U.S. Sales
  YTD Fiscal 2006
    
    
    YTD Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    6,201,000
    
    
    $
    4,585,000
    
    
    $
    1,616,000
    
    
    
    35.2
    %On Board Services
    
    
    6,238,000
    
    
    
    8,466,000
    
    
    
    (2,228,000
    )
    
    
    (26.3
    %)Retail
    
    
    8,158,000
    
    
    
    3,941,000
    
    
    
    4,217,000
    
    
    
    107.0
    %Military
    
    
    11,808,000
    
    
    
    4,000,000
    
    
    
    7,808,000
    
    
    
    195.2
    %National Restaurant Chain
    
    
    2,365,000
    
    
    
    1,379,000
    
    
    
    986,000
    
    
    
    71.5
    %Total
    
    $
    34,770,000
    
    
    $
    22,371,000
    
    
    $
    12,399,000
    
    
    
    55.4
    %
 20
      France Sales
  YTD Fiscal 2006
    
    YTD Fiscal 2005
    
    $ Change
    
    %ChangeSales in U.S. Dollars
    
    $
    14,544,000
    
    
    $
    11,749,000
    
    
    $
    2,795,000
    
    
    
    23.8
    %Sales in Euros
    
    
    12,082,000
    
    
    
    9,219,000
    
    
    
    2,863,000
    
    
    
    31.1
    %Average exchange rate
    
    
    0.831
    
    
    
    0.785
  
  YTD Fiscal 2006
    
    
    YTD Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    3,518,000
    
    
    $
    3,926,000
    
    
    $
    (408,000
    )
    
    
    (10.4
    %)On Board Services
    
    
    6,512,000
    
    
    
    3,650,000
    
    
    
    2,862,000
    
    
    
    78.4
    %Retail
    
    
    4,470,000
    
    
    
    4,121,000
    
    
    
    349,000
    
    
    
    8.5
    %Others
    
    
    44,000
    
    
    
    52,000
    
    
    
    (8,000
    )
    
    
    (15.4
    %)Total
    
    $
    14,544,000
    
    
    $
    11,749,000
    
    
    $
    2,795,000
    
    
    
    23.8
    %
 21
      Gross Margin
  Forty weeks endedApr. 1, 2006
    
    Apr. 2, 2005
    
    % Change(Dollars in thousands)Net sales
    
    $
    49,314
    
    
    $
    34,120
    
    
    
    44.5
    %Gross margin
    
    $
    12,924
    
    
    $
    8,828
    
    
    
    46.4
    %Gross margin percentage
    
    
    26.2
    %
    
    
    25.9
    %Income from continuing operations
    
    $
    2,968
    
    
    $
    1,323
    
    
    
    124.3
    %Net income
    
    $
    2,968
    
    
    $
    1,266
    
    
    
    134.4
    %
   Selling and Administrative Expenses
  YTD Fiscal 2006
    
    
    YTD Fiscal 2005
    
    
    $ Change
    
    
    %ChangeUSA
    
    $
    7,193,000
    
    
    $
    5,206,000
    
    
    $
    1,987,000
    
    
    
    38.2
    %France
    
    
    2,298,000
    
    
    
    1,814,000
    
    
    
    484,000
    
    
    
    26.7
    %Total SG&A Expense
    
    $
    9,491,000
    
    
    $
    7,020,000
    
    
    $
    2,471,000
    
    
    
    35.2
    %
  22
      Depreciation and Amortization
  Non-operating Income and Expense from Continuing Operations
  Provision for Taxes
  Impact of Inflation and the Economy
    Liquidity and Capital Resources
   23
        
  
   
   
   
     24
      FUTURE PROSPECTS
  Food Service
  On Board Services
  Retail
  Military
 25
        National Restaurant Chains
  26
      Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Exposure
  Foreign Currency Risk
  Sales and Marketing Risks
  27
      Item 4. Controls and Procedures
    28
      CUISINE SOLUTIONS, INC.
 PART II: OTHER INFORMATION
 Item 1. Legal Proceedings.
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Item 3. Defaults Upon Senior Securities
  Item 4. Submission of Matters to a Vote of Security Holders
  Item 5. Other Information
  Item 6. Exhibits
 EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    Restated Certificate of Incorporation, as amended. (1)3.2
    
    Certificate of Amendment of Restated Certificate of Incorporation. (2)3.3
    
    By-laws. (3)10.61
    
    Loan Contract dated April 19, 2006 with Credit Industriel de Normandie. (4)31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certifications of Chief Executive
Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 (1)
    
    Incorporated by reference to exhibit 3-A of the Registrants Form 10-K/A for the year
ended June 27, 1992, filed with the Commission on April 2, 1993.(2)
    
    Incorporated by reference to exhibit 3-A of the Registrants Form 10-K/A for the year
ended June 27, 1992, filed with the Commission on April 2, 1993.(3)
    
    Incorporated by reference to exhibit 3-B of the Registrants Form 10-K/A for the year
ended June 27, 1992, filed with the Commission on April 2, 1993.(4)
    
    Incorporated by reference to exhibit 10.61 of the Registrants Form 8-K filed with the
Commission on April 25, 2006. 29
      SIGNATURES
  CUISINE SOLUTIONS, INC.Date: May 11, 2006
    
    By:
    
    /s/Stanislas VilgrainStanislas VilgrainChief Executive OfficerBy:
    
    /s/Y. Tristan KuoY. Tristan KuoChief Financial Officer, Treasurer andCorporate Secretary
 30