<PAGE>
                   U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                  For the Quarter Period Ended March 31, 1997

                           Commission File No. 0-18200

                        ARMANINO FOODS OF DISTINCTION, INC.
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)

          Colorado                                     84-1041418
------------------------------             ----------------------------------
(State or other jurisdiction of           (IRS Employer Identification Number)
Incorporation or Organization)

              30588 San Antonio Street, Hayward, California 94544
          -----------------------------------------------------------
          (Address of Principal Executive Offices including zip code)

                                (510) 441-9300
                        ------------------------------
                          (Registrant's telephone number)

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 report(s), and (2) has been subject to
such filing requirements for the past 90 days.

                              Yes [ X ]   No [   ]

There were 11,594,099 shares of the Registrant's Common Stock outstanding as
of March 31, 1997.
<PAGE>
                  PART I - FINANCIAL INFORMATION

               ARMANINO FOODS OF DISTINCTION, INC.
              Condensed Consolidated Balance Sheets
                           (Unaudited)
                                 
                              ASSETS
                                                 March 31,  December 31,
                                                    1997        1996   
                                                ----------- -----------
Current Assets:
  Cash and cash equivalents                      $  526,129  $  742,856
  Treasury bills, held to maturity                3,940,001   3,990,912
  Accounts receivable                               836,715   1,698,339
  Inventory                                       1,056,145   1,066,904
  Prepaid expenses                                  142,864     108,106
  Current deferred tax asset                        648,377     656,000
                                                ----------- -----------
    Total Current Assets                          7,150,231   8,263,117

Property and Equipment, Net                       2,515,093   2,599,936 

Other Assets:
  Deposits                                        1,615,520     477,610
  Goodwill, net                                     574,938     585,438
                                                ----------- -----------
    Total Other Assets                            2,190,458   1,063,048
                                                ----------- -----------
    Total Assets                                $11,855,782 $11,926,101
                                                ----------- -----------
               LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable and accrued expenses         $   688,538 $   999,476
  Notes payable                                      16,236      32,073
  Current portion of long-term debt                  26,369      25,749
  Line of credit payable                            300,000           -
  Net liabilities of discontinued operations              -      75,145
                                                ----------- -----------
    Total Current Liabilities                     1,031,143   1,132,443

Deferred tax liability                              126,000     126,000

Long-term debt                                       39,103      45,850
                                                ----------- -----------
    Total Liabilities                             1,196,246   1,304,293

Stockholders' Equity: 
  Common stock                                   11,538,989  11,529,739
  Additional paid in capital                         22,311      22,311
  Accumulated deficit                              (901,764) (  930,242)
                                                ----------- -----------
    Total Stockholders' Equity                   10,659,536  10,621,808

    Total Liabilities and Stockholders' Equity  $11,855,782 $11,926,101

The accompanying notes are an integral part of these condensed financial
statements.  The balances for December 31, 1996 were taken from the audited
financial statements at that date and condensed. 
                               -2-
<PAGE>
                  PART I - FINANCIAL INFORMATION

               ARMANINO FOODS OF DISTINCTION, INC.
         Condensed Consolidated Statements of Operations
          For the Quarter Ended March 31, 1997 and 1996
                           (Unaudited)
                                                 March 31    March 31
                                                   1997        1996
                                                ----------  ----------
Net Sales                                       $3,339,613  $3,385,199

Cost of Goods Sold                               2,349,861   2,194,002

    Gross Profit                                   989,752   1,191,197

Operating Expenses:
  General and administrative                       362,741     254,204
  Salaries and wages                               335,511     298,773
  Commissions                                      109,344     104,844
  Advertising, demonstrations, promotions,   
     and slotting allowances                       188,248     181,136

    Total Operating Expenses                       995,844     838,957
     
Income (Loss) From Operations                       (6,092)    352,240

Other Income                                        55,193      48,282

Income From Continuing Operations Before
     Income Taxes                                   49,101     400,522

Current Tax Expense                                 13,000           -

Deferred Tax Expense                                 7,623     160,209
                                               ----------- -----------
Net Income                                     $    28,478 $   240,313
                                               ----------- -----------
Primary Earnings Per Share                     $       .00 $       .02
                                               ----------- -----------
Weighted Average Common Shares                  11,826,072  11,147,689
 Outstanding                                   ----------- -----------

The accompanying notes are an integral part of these condensed financial
statements.
                               -3-
<PAGE>
                  PART I - FINANCIAL INFORMATION

               ARMANINO FOODS OF DISTINCTION, INC.
         Condensed Consolidated Statements of Cash Flows
          For the Quarter Ended March 31, 1997 and 1996
                           (Unaudited)

                                                March 31     March 31
                                                  1997         1996   
                                               ----------- -----------
Cash Flows From Operating Activities:
  Net income                                   $    28,478 $   240,313
  Adjustment to reconcile net income to net
    cash (used for) provided by operations:
   Depreciation and amortization                   104,146      74,049
   Changes in assets and liabilities:
     Decrease in accounts receivable               861,624     306,288
     Decrease in inventories                        10,759      86,423
     (Increase) Decrease in prepaid expenses      ( 34,758)     25,254
     (Increase) in other assests                         -       3,914
     Decrease in deferred tax assets                 7,623     160,209
     (Decrease) in accounts payable and
       accrued expenses                           (310,938)   (336,050)
     Increase (decrease) in net liabilities
       of discontinued operations                 ( 75,145)          -
                                               ----------- -----------
     Total Adjustments                             563,311     320,087

Net Cash Provided By Operating Activities          591,789     560,400

Cash Flows To Investing Activities:
  Increase in deposits on future equipment
     purchase                                   (1,137,910)          -
  Capital expenditures                          (    8,803)   (254,827)
  Reduction (increase) in U.S. treasury 
     bills, net                                     50,911    (607,462)
       Net Cash (Used For)
        Investing Activities                    (1,095,802) (  862,289)
                                               ----------- -----------
Cash Flows From Financing Activities:
  Issuance of common stock                           9,250   2,648,825
  Payments on capital lease obligations            ( 6,127) (    5,682)
  Increase in borrowings                           300,000           -
  Payments on notes payable                        (15,837)          -
                                               ----------- -----------
Net Cash Provided By Financing Activities:         287,286   2,643,143

Net Increase (Decrease) In Cash and
  Cash Equivalents                               ( 216,727)  2,341,254
                                               ----------- -----------
Cash and Cash Equivalents Beginning of Period      742,856     746,250
                                               ----------- -----------
Cash and Cash Equivalents End of Period        $   526,129 $ 3,087,504
                                               ----------- -----------

The accompanying notes are an integral part of these condensed financial
statements.
                                 -4-
<PAGE>
                   PART I - FINANCIAL INFORMATION

                 ARMANINO FOODS OF DISTINCTION, INC.
       Notes to Condensed Consolidated Financial Statements
                          March 31, 1997
                           (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information.  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 management, all
adjustments, consisting of normal recurring accruals, considered necessary for
a fair presentation have been included.  It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the December 31, 1996 audited
financial statements for Armanino Foods of Distinction, Inc.  The results of
operations for the periods ended March 31, 1997 and 1996 are not necessarily
indicative of the operating results for the full year.

     The condensed consolidated financial statements include the accounts of
Armanino Foods of Distinction, Inc. ("Parent") and it's wholly-owned
subsidiaries AFDI, Inc, (dba "Focaccia di Genova") and Alborough, Inc. (dba
"Emilia Romagna").

     For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments (Treasury Bills) purchased with a maturity of
three months or less to be cash equivalents.  

     The calculation of primary earnings per share is based on the weighted
average number of outstanding common shares during the period plus, when their
effect is dilutive, additional shares assuming the exercise of certain vested
and non-vested stock options and warrants reduced by the number of shares
which could be repurchased with proceeds.  Fully dilutive earnings per share
are not presented as their effect for the quarter ended March 31, 1997 and
March 31, 1996 was anti-dilutive.

     The Company acquired a subsidiary (Alborough, Inc.) during May, 1996. 
The Company recorded goodwill in the amount of $609,938 as part of the
purchase.  The Company is amortizing the goodwill over 15 years, on a straight
line basis.

NOTE 2 - INVENTORY

     Inventory is carried at the lower of cost or market with cost being
determined on the first-in, first-out method and consisted of the following at
March 31, 1997 and December 31, 1996:
                                                March 31,    December 31,
                                                  1997           1996
                                               ----------    -----------
     Raw materials & supplies                 $  385,433    $   275,472
     
     Finished goods                              670,712        791,432
                                               ----------    -----------
                                               $1,056,145    $ 1,066,904
<PAGE>
                               -5-
                  PART I - FINANCIAL INFORMATION

               ARMANINO FOODS OF DISTINCTION, INC.
       Notes to Condensed Consolidated Financial Statements
                          March 31, 1997
                           (Unaudited)

NOTE 3 - RELATED PARTY TRANSACTIONS

     The Company incurred $10,256 and $10,500 respectively, for the three
months ended March 31, 1997 and 1996, in accounting and consulting fees to
Polly, Scatena, Gekakis & Co., an accounting firm, the managing partner of
which is also a stockholder and director of the Company.  Services provided by
the accounting firm are an extension of the internal accounting functions of
the Company, as well as management, business and systems consulting.

NOTE 4 - INCENTIVE COMPENSATION

     The Company has accrued $24,272 and $76,725 for the three months ended
March 31, 1997 and March 31, 1996 respectively, for its management and
employee incentive compensation plans.  These amounts are based on achieving a
predetermined level of sales, net income and personal goals and objectives. 
For the current year this amount is eligible for distribution only when the
(1) predetermined level of sales and net income and/or (2) personal goals and
objectives are achieved. 

NOTE 5 - PROPERTY AND EQUIPMENT

     Property and equipment consists of the following:

                                               March 31,    December 31,
                                                  1997         1996
                                               ----------   ----------
     Furniture & Office Equipment             $  227,362    $  224,968
     Plant Machinery & Equipment               2,101,257     2,096,048
     Leasehold Improvements                     1,390,424    1,389,223
                                                  3,719,043  3,710,239
                                               ----------   ----------
     Accumulated Depreciation                  1,203,950    1,110,303         
                                               ----------   ----------
                                               $2,515,093   $2,599,936
                                               ----------   ----------

     As of March 31, 1997 the Company had made deposits in the amount of
$1,600,000 for equipment and leasehold improvements to be placed in service
during the second quarter of 1997 at its Hayward, California facility.

     On May 20, 1996, the Company acquired Alborough, Inc., (dba Emilia
Romagna).  The Company recorded property and equipment acquired at the fair
market value of these assets on May 20, 1996.  Above amounts include the
property and equipment acquired through the purchase of Alborough, Inc.

NOTE 6 - LINES OF CREDIT

     In September of 1994, the Company obtained two lines of credit totalling
$1,250,000 with Wells Fargo Bank in San Francisco, California.  These two
lines consisted of a $500,000 business loan line of credit and a $750,000
equipment loan line of credit.  
                               -6-
<PAGE>
                  PART I - FINANCIAL INFORMATION

               ARMANINO FOODS OF DISTINCTION, INC.
       Notes to Condensed Consolidated Financial Statements
                          March 31, 1997
                           (Unaudited)

     The $500,000 business loan provides for interest at prime plus .75% with
a maturity date of September 10, 1997.  At March 31, 1997, there was a balance
of $300,000 due on this line.  This line of credit is secured by the Company's
inventory, accounts receivable and equipment.  

     The $750,000 equipment loan line of credit provided for interest at
prime plus .75% with a conversion date of September 15, 1997 to an installment
equipment loan.  At March 31, 1997, there were no amounts borrowed against
this line.  This line of credit is secured by the Company's inventory,
accounts receivable and equipment. 

NOTE 7 - NOTES PAYABLE

     At March 31, 1997, the Company's subsidiary, Alborough, Inc., was
obligated to pay a note in the amount of $16,236.  The note provides for
monthly payments of principal and interest at an annual rate of 10%.  The
final payment is due June 30, 1997.  

NOTE 8 - INCOME TAXES

     Effective January 1, 1993 the Company adopted FASB Statement 109,
"Accounting for Income Taxes."  

     As of March 31, 1997 and December 31, 1996 the net deferred tax assets
and liabilities consisted of the following:

                                          March 31     December 31
                                            1997          1996
                                         ----------   -----------
     Current deferred tax asset         $  648,377     $  656,000
     Deferred Tax Liability               (126,000)      (126,000)

     Management estimates that the Company will generate adequate net profits
to offset net operating loss carryforwards prior to the expiration of the net
operating loss carryforwards.  Consequently, a deferred tax asset valuation
allowance has not been accrued.

NOTE 9 - COMMON STOCK ISSUANCES

     The Company  received $9,250 from the issuance of 10,000 shares at $.925
in connection with options exercised, under the 1993 Stock Option Plan.  

NOTE 10 - ACQUISITION OF SUBSIDIARY

     On May 20, 1996, the Company acquired all of the outstanding common
stock of Alborough, Inc., (dba Emilia Romagna), in a business combination
accounted for as a purchase.  Alborough, Inc. is primarily engaged in the
manufacturing of gourmet Italian foods.  The results of operations of
Alborough, Inc. is included in the accompanying financial statements since the
date of acquisition.  The total cost of the acquisition was $738,779, which
exceeded the fair market value of the net assets of Alborough, Inc. by
$609,938.  The excess is recorded as goodwill and is being amortized over 15
years.  The purchase price could increase
                               -7-
<PAGE>
                  PART I - FINANCIAL INFORMATION

               ARMANINO FOODS OF DISTINCTION, INC.
       Notes to Condensed Consolidated Financial Statements
                          March 31, 1997
                           (Unaudited)

NOTE 10 - ACQUISITION OF SUBSIDIARY (Continued)

significantly depending upon Alborough, Inc. meeting certain earnings
performance criteria over the next 3 years.  The agreement between the parties
provides that additional payments may be earned by Alborough, Inc's previous
shareholders based on a percentage of gross margin attributable to sales made
to specified customers.  The sales must be made during a specified period of
time and subject to certain minimum sales levels being achieved.  As of March
31, 1997, no additional payments have been made to Alborough Inc.'s former
shareholders as minimum sales to the specified customers had not been
achieved.

NOTE 11 - DISCONTINUED OPERATIONS

     During the first quarter of 1997 the Company closed its quick service
Italian restaurant locations and discontinued the operations of AFDI, Inc.  
The Company completed the disposition of the business during the second
quarter of 1997.  AFDI, Inc. is reported as a discontinued operation for the
year ended December 31, 1996.  During the three months March 31, 1997, the net
liability from discontinued operations has been reduced to $0.
                               -8-
<PAGE>
                  PART I - FINANCIAL INFORMATION
   ITEM II:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS

QUARTER ENDED MARCH 31, 1997 V. QUARTER ENDED MARCH 31, 1996

     Net sales for the quarter ended March 31, 1997 were $3,339,613 as
compared to $3,385,199 for the quarter ended March 31, 1996.  The decrease in
sales is primarily attributable to lower pasta sales.  This decrease is due to
the decision of a club store customer in August 1996 to buy its pasta products
from a different manufacturer.  The Company's pesto product line showed a 10%
increase during the quarter ended March 31, 1997 compared to the quarter ended
March 31, 1996.  Sales of the pesto product line continue to be strong in the
foodservice area.  Meatball sales for the first quarter were weaker, primarily
due to strong sales in December of 1996 which increased inventories with our
customers and decreased sales during the first quarter of 1997.

     Cost of goods sold as a percentage of net sales increased from 64.8% for
the quarter ended March 31, 1996 to 70.4% for the quarter ended March 31,
1997.  This increase was primarily due to a change in the product mix.  The
change in the product mix was the result of purchasing a new subsidiary
(Alborough, Inc.).  The new products of the subsidiary currently have lower
margins than some of the Company's other products.  Additionally, lower pasta
sales contributed to a higher percentage for cost of goods sold, due to fixed
costs being incurred but not absorbed by sales.

     Operating expenses as a percentage of net sales were approximately 29.8%
for the quarter ended March 31, 1997 as compared to 24.8% for the quarter
ended March 31, 1996.  The increase for the quarter is primarily due to
increases in general and administrative expenses and salaries expense. 
General and administrative expenses increased due to the inclusion of
Alborough, Inc. in the consolidated financial statements and the hiring of a
public relations firm.  Additionally, the revision of the packaging design and
merchandising materials for the Company's product lines added to this expense. 
Salaries increased due to additional personnel at the Company. 

     Net income was $28,478 for the quarter ended March 31, 1997, as compared
to $240,313 for the quarter ended March 31, 1996.  The decrease in the net
income for the first quarter of 1997 compared to the first quarter of 1996 is
attributed to lower sales, lower gross margins due to the change in the
product mix and an increase in operating expenses.

QUARTER ENDED MARCH 31, 1997 V. QUARTER ENDED MARCH 31, 1996

LIQUIDITY AND CAPITAL RESOURCES

     At March 31, 1997, the Company had working capital of $6,119,088, a
decrease of $1,011,586 from December 31, 1996.  The decrease was primarily due
to deposits being made on pasta equipment purchases.  Current assets included
$5,302,845 in cash and cash equivalents, U.S. treasury bills, and accounts
receivable.  Management believes that this level of working capital is
adequate to meet anticipated needs for liquidity.

     During the three months ended March 31, 1997, cash provided by operating
activities of the Company amounted to $591,789.  This was primarily a result
of the decrease in accounts receivable.
                               -9-
<PAGE>
                  PART I - FINANCIAL INFORMATION

   ITEM II:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS

     In September 1994, the Company obtained two lines of credit totaling
$1,250,000 with Wells Fargo Bank in San Francisco, California.  These two
lines consisted of a $500,000 business loan line of credit and a $750,000
equipment loan line of credit.  The $500,000 business loan provides for
interest at prime plus .75% with a maturity date of September 10, 1997.  The
$750,000 equipment loan line of credit provides for interest at prime plus
 .75% with a conversion date of September 15, 1997, to an installment equipment
loan.  At March 31, 1997, there was a $300,000 balance due on the business
loan line.  The purpose for obtaining both lines of credit was to afford the
Company greater cash liquidity.

     The Company has made deposits on manufacturing equipment and leasehold
improvements in the amount of $1,600,000 as of March 31, 1997.  The Company
anticipates incurring an additional $500,000 during the second quarter for
equipment and leasehold improvements.  The equipment and leasehold
improvements are expected to be placed in service during the second quarter of
1997 at the Hayward, California facility.

     On May 20, 1996, the Company purchased all of the outstanding stock of
Alborough, Inc. (dba Emilia Romagna).  The total cost of the acquisition was
$738,779 including professional fees paid in relation to the acquisition. 
Additionally, the terms of the agreement include an "earn-out" formula which 
provides for payments to Alborough shareholders over a three year period based
on certain performance criteria established.  The purchase price could
increase significantly depending upon Alborough, Inc. meeting certain earnings
performance criteria over the next 3 years.  The agreement between the parties
provides that additional payments may be earned by Alborough, Inc.
shareholders based on a percentage of gross margin attributable to sales made
to specified customers.  The sales must be made during a specified period of
time and subject to certain minimum sales levels being achieved.  As of March
31, 1997, the Company has not incurred any additional cost due to this
provision.
                               -10-
<PAGE>
                             PART II
                        OTHER INFORMATION

II.  OTHER INFORMATION

     Item 1.   Legal Proceedings
               None

     Item 2.   Changes In Securities
               None

     Item 3.   Defaults Upon Senior Securities
               None

     Item 4.   Submission Of Matters To A Vote Of Security Holders
               None

     Item 5.   Other Information
               None

     Item 6.   Exhibits And Reports On Form 8-K
               A.  Exhibits
                    27 - Financial Data Schedule       Filed herewith
                                                       electronically
               B.  Reports on Form 8-K - None

                            SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf of the
undersigned thereunto duly authorized.

                              ARMANINO FOODS OF DISTINCTION, INC.

Dated May 6, 1997                  By /s/ William J. Armanino
                                       ---------------------------------------
                                         William J. Armanino
                                         President
                                         Chief Executive Officer
                                         Chief Financial Officer
                                         Treasurer