<PAGE>   1

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------

                                   FORM 10-Q

                            ------------------------

(MARK ONE)

   [X]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MAY 31, 1999

                                       OR
   [ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)OF
                      THE SECURITIES EXCHANGE ACT OF 1934

            FOR THE TRANSITION PERIOD FROM
                           TO

                         COMMISSION FILE NUMBER 1-8574

                               UNITED FOODS, INC.
             (Exact name of registrant as specified in its charter)

                                    DELAWARE
                            (State of Incorporation)
                                   74-1264568
                      (I.R.S. Employer Identification No.)

                         TEN PICTSWEET DRIVE, BELLS, TN
                    (Address of principal executive offices)
                                     38006
                                   (Zip Code)

       Registrant's telephone number, including area code: (901) 422-7600

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     On June 18, 1999, 2,617,243 shares of Class A Common Stock and 4,192,686
shares of Class B Common Stock of United Foods, Inc. were outstanding.

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<PAGE>   2

                                     INDEX

<TABLE>
<CAPTION>
                                                                       PAGE
                                                                       -----
<S>      <C>                                                           <C>
Part I:  Financial Information:
Item 1:  Financial Statements:
         Balance Sheets..............................................      3
         Statements of Income........................................      4
         Statements of Cash Flows....................................      5
         Notes to Financial Statements...............................    6-7

Item 2:  Management's Discussion and Analysis of Financial Condition
         and Results of Operations...................................   8-13
Part
  II:    Other Information and Signatures............................     14
</TABLE>

                                        2
<PAGE>   3

PART I -- FINANCIAL INFORMATION

ITEM 1 -- FINANCIAL STATEMENTS

                               UNITED FOODS, INC.

                                 BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               MAY 31,      FEBRUARY 28,
                                                                1999            1999
                                                              ---------     ------------
                                                              UNAUDITED
<S>                                                           <C>           <C>
ASSETS
Current Assets:
  Cash......................................................  $  6,764        $  2,027
  Accounts Receivable.......................................    15,349          19,154
  Inventories (Note 3)......................................    41,705          37,785
  Prepaid Expenses and Miscellaneous........................     2,892           3,296
  Deferred Income Taxes (Note 4)............................     1,641           1,641
                                                              --------        --------
          Total Current Assets..............................    68,351          63,903
                                                              --------        --------
Property and Equipment:
  Land and Land Improvements................................    13,814          13,814
  Buildings and Leasehold Improvements......................    22,270          22,227
  Machinery, Equipment and Improvements.....................   108,678         103,388
                                                              --------        --------
                                                               144,762         139,429
  Less Accumulated Depreciation.............................   (82,885)        (80,876)
                                                              --------        --------
     Net Property and Equipment.............................    61,877          58,553
                                                              --------        --------
Other Assets................................................     1,001             944
                                                              --------        --------
          Total Assets......................................  $131,229        $123,400
                                                              ========        ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts Payable..........................................  $ 13,874        $ 13,638
  Accruals..................................................     7,559           7,670
  Income Taxes Payable (Note 4).............................        --             514
  Current Maturities of Long-term Debt......................     3,519           2,496
                                                              --------        --------
          Total Current Liabilities.........................    24,952          24,318
Long-term Debt, Less Current Maturities.....................    55,271          48,302
Deferred Income Taxes (Note 4)..............................     4,512           4,512
                                                              --------        --------
          Total Liabilities.................................    84,735          77,132
                                                              --------        --------
Stockholders' Equity:
  Common Stock, Class A (Notes 5 and 6).....................     2,617           2,617
  Common Stock, Class B, Convertible (Notes 5 and 6)........     4,193           4,193
  Additional Paid-in Capital................................     3,993           3,993
  Retained Earnings.........................................    35,691          35,465
                                                              --------        --------
          Total Stockholders' Equity........................    46,494          46,268
                                                              --------        --------
          Total Liabilities and Stockholders' Equity........  $131,229        $123,400
                                                              ========        ========
</TABLE>

See accompanying notes to financial statements.

                                        3
<PAGE>   4

                               UNITED FOODS, INC.

                        STATEMENTS OF INCOME (UNAUDITED)
                (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                   FOR THE THREE
                                                               MONTHS ENDED MAY 31,
                                                              -----------------------
                                                                1999          1998
                                                              --------     ----------
<S>                                                           <C>          <C>
Net Sales and Service Revenues..............................  $ 47,520     $   49,934
Costs of Sales and Services (Note 3)........................    38,360         40,545
                                                              --------     ----------
  Gross Profit..............................................     9,160          9,389
Selling, Administrative and General Expenses................     7,741          8,101
                                                              --------     ----------
  Operating Income..........................................     1,419          1,288
                                                              --------     ----------
Interest Income (Expense)-- Net.............................    (1,052)          (887)
Miscellaneous Income (Expense) -- Net.......................         1             --
                                                              --------     ----------
          Total Other Income and (Expense)..................    (1,051)          (887)
                                                              --------     ----------
  Income Before Taxes on Income.............................       368            401
Taxes on Income (Note 4)....................................       142            154
                                                              --------     ----------
  Net Income................................................  $    226     $      247
                                                              ========     ==========
Weighted Average Common Shares..............................  6,809,929     6,809,929
                                                              ========     ==========
Basic and Diluted Earnings Per Common Share (Note 6)........  $    .03     $      .04
                                                              ========     ==========
Cash Dividends Per Common Share:
  Class A...................................................  $    -0-     $      -0-
  Class B...................................................  $    -0-     $      -0-
</TABLE>

See accompanying notes to financial statements.

                                        4
<PAGE>   5

                               UNITED FOODS, INC.

                      STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   FOR THE THREE
                                                               MONTHS ENDED MAY 31,
                                                              -----------------------
                                                                1999          1998
                                                              --------     ----------
<S>                                                           <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income................................................  $    226     $      247
  Adjustments to reconcile net income to net cash provided
     by operations:
     Depreciation and amortization..........................     2,008          1,908
     Provision for losses on accounts receivable............        43             47
     Change in assets and liabilities:
       Accounts and notes receivable........................     3,762          3,857
       Inventories..........................................    (3,920)         2,073
       Prepaid expenses and miscellaneous...................       404            445
       Other assets.........................................       (57)           162
       Accounts payable and accruals........................        92          2,607
       Income taxes.........................................      (514)            15
                                                              --------     ----------
     Net cash provided by operations........................     2,044         11,361
                                                              --------     ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures......................................    (2,243)        (2,110)
                                                              --------     ----------
     Net cash used by investing activities..................    (2,243)        (2,110)
                                                              --------     ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from long-term borrowings........................     6,254            871
  Payments of long-term debt................................    (1,318)        (7,596)
                                                              --------     ----------
     Net cash provided (used) by financing activities.......     4,936         (6,725)
                                                              --------     ----------
NET INCREASE IN CASH FOR THE PERIOD.........................     4,737          2,526
CASH AND CASH EQUIVALENTS, beginning of period..............     2,027            646
                                                              --------     ----------
CASH AND CASH EQUIVALENTS, end of period....................  $  6,764     $    3,172
                                                              ========     ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
  INFORMATION:
  Cash paid during the three months for:
     Interest...............................................  $    876     $      888
     Income taxes...........................................  $    591     $       13
NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Capital expenditures of $676, $643, $96 and $228 are
     included in accounts payable at May 31, 1999, February
     28, 1999, May 31, 1998 and February 28, 1998,
     respectively.
  During April 1999, the Company purchased equipment for
     approximately $3,056,000 that it had previously leased.
     Funds for the purchase were disbursed directly to the
     seller upon the closing of a $5,400,000 term loan and
     the balance of the loan proceeds was disbursed to the
     Company.
</TABLE>

See accompanying notes to financial statements.

                                        5
<PAGE>   6

                               UNITED FOODS, INC.

                         NOTES TO FINANCIAL STATEMENTS

     1. The interim financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended February 28, 1999.
Significant accounting policies and other disclosures normally provided have
been omitted since such items are disclosed therein.

     In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly its financial position as of May 31, 1999
and its results of operations and cash flows for the three months ended May 31,
1999 and 1998.

     2. The results of operations for the three months ended May 31, 1999 and
1998 are not necessarily indicative of the results to be expected for the fiscal
year.

     3. Inventories are summarized as follows:

<TABLE>
<CAPTION>
                                                             MAY 31,       FEBRUARY 28,
                                                              1999             1999
                                                           -----------     ------------
<S>                                                        <C>             <C>
Finished products........................................  $35,830,000     $32,675,000
Raw materials............................................    1,945,000       2,223,000
Growing crops............................................    3,091,000       2,342,000
Merchandise and supplies.................................      839,000         545,000
                                                           -----------     -----------
                                                           $41,705,000     $37,785,000
                                                           ===========     ===========
</TABLE>

     Substantially all of the Company's inventories are valued at the lower of
cost (first-in, first-out) or market at each fiscal year end. However, due to
the seasonality of vegetable processing, the gross profit method, at the
estimated annual rate, is used to determine frozen vegetable cost of goods sold
in interim financial statements.

     4. Taxes on income consist of the current and deferred taxes required to be
recognized for the periods presented in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes."

     5. Each share of Class B Common Stock is convertible into one share of
Class A Common Stock at the holder's election. Holders of the Class A Common
Stock are entitled to a preference dividend of $.025 per share for any quarter
and each preceding quarter of the Company's fiscal year before the holders of
the Class B Common Stock are entitled to any regular cash dividend. Holders of
Class A Common Stock have the right to elect a number of directors that equal at
least 25% of the members of the board of directors. In addition, on matters
requiring the classes to vote together, holders of the Class A Common Stock are
entitled to 1/10 vote per share and holders of Class B Common Stock are entitled
to one vote per share.

     On September 16, 1998, the Company received an offer from its chairman and
chief executive officer, James I. Tankersley, and his family to acquire the
remaining shares of the Company's Common Stock that are not already owned by Mr.
Tankersley, his wife or their children (the "Jim Tankersley Family"), in a
merger in which the other stockholders would receive $3.00 per share. On
receiving the proposal, the Board of Directors of the Company appointed two
outside directors to a special committee. The Board designated the committee for
the purpose of evaluating and making recommendations with respect to the
proposal. After receiving the recommendation of the special committee, on May
14, 1999, the Company entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Pictsweet LLC, a Delaware limited liability company and UF
Acquisition Corp., a wholly-owned subsidiary of Pictsweet LLC, pursuant to which
UF Acquisition Corp. will be merged with and into the Company with the Company
being the surviving corporation and becoming a wholly-owned subsidiary of the
Pictsweet LLC, subject to the conditions set forth in the Merger Agreement.
Pursuant to the Merger Agreement, outstanding shares of the Company's Common
Stock, except for Common Stock held by the Jim Tankersley Family and Common
Stock owned by stockholders who perfect their appraisal rights in accordance
with Delaware law, will be converted into the right to receive $3.50 per

                                        6
<PAGE>   7
                               UNITED FOODS, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

share in cash. If consummated, the Jim Tankersley Family will directly or
indirectly own the entire equity interest of the Company.

     A complaint was filed by a stockholder of the Company on March 8, 1999,
against the Company and its directors in a Delaware Court of Chancery. The
complaint seeks class action status and alleges (among other things) that the
defendants breached their fiduciary duties to the Company's stockholders with
respect to the proposal by the Jim Tankersley Family to acquire the remaining
shares of the Company's Common Stock that are not owned by them. The complaint
requests an injunction prohibiting the consummation of the transaction, damages
and other relief. A second complaint was filed by a stockholder of the Company
on May 3, 1999, against the Company and its directors in a Delaware Court of
Chancery. This complaint also seeks class action status, makes similar
allegations with respect to the transaction and requests similar relief.

     6. Basic and diluted earnings per share of common stock have been computed
based upon the weighted average number of shares outstanding during the three
months ended May 31, 1999 and May 31, 1998.

                                        7
<PAGE>   8

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial condition and
earnings during the periods included in the accompanying balance sheets and
statements of income.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

     This Quarterly Report on Form 10-Q and other reports and statements issued
on behalf of the Company may include forward-looking information in reliance on
the safe harbor provided by the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to substantial risks and
uncertainties, including those discussed below, and actual results may differ
materially from those contained in any such forward-looking statement. The
review of factors pursuant to the Private Securities Litigation Reform Act of
1995 should not be construed as exhaustive. Further, the Company undertakes no
obligation to update or revise any such forward-looking statements to reflect
subsequent events or circumstances.

     The Company's liquidity, capital resources and results of operations may be
affected from time to time by a number of factors and risks, including, but not
limited to: the impact of the Merger Agreement and Merger referred to herein;
trends in the economy as a whole, which may affect consumer confidence and
consumer demand for the types of food products sold by the Company; competitive
pressures from domestic and foreign processors and distributors of fresh, dry,
frozen and canned food products which may affect the nature and viability of the
Company's business strategy; competitive pressures from imported food products;
unpredictable changes in growing conditions inherent in agriculture; other
agricultural risks, including those associated with pesticides, herbicides and
disease control and crop protection efforts; the Company's ability to maintain
and expand its distribution base; the Company's ability to maintain and improve
its plants, equipment and technological systems; changes in the Company's
customer base as the result of competition and/or consolidation of retail
grocery chains; risks associated with governmental regulation and taxation,
including the existence of tariffs; availability and cost of labor employed;
changes in industry capacity and production; the availability, costs and terms
of financing, including the risk of rising interest rates; availability of trade
credit and terms with vendors; the Company's use of financial leverage and the
potential impact of such leverage on the Company's ability to execute its
operating strategies; the ability to maintain gross profit margins; the seasonal
nature of the Company's business and the ability of the Company to predict
consumer demand as a whole, as well as demand for specific items; costs
associated with the storage, shipping, handling and control of inventory;
potential adverse publicity for the food industry or certain of the Company's
food products; and the ability of the Company and significant third parties with
whom it does business to effect conversions to new technological systems,
including becoming Year 2000 compliant.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary sources of cash are operations and external committed
credit facilities. At May 31, 1999, the Company's revolving credit facility
totaled $18,000,000, all of which was available. The Company's sources of
liquidity are expected to meet adequately requirements for the upcoming year and
the foreseeable future; however, new financing alternatives are constantly
evaluated to determine their practicality and availability in order to provide
the Company with sufficient and timely funding at the least possible cost. The
Company's $18,000,000 revolving credit facility currently matures in fiscal
2002. One-year extensions of the maturity date will be considered annually by
the lender. If annual extensions are not granted, the Company will then
investigate revolving credit facilities with other lenders and believes it can
replace any current revolving credit facility within its remaining 24-month
term.

     On September 16, 1998, the Company received an offer from its chairman and
chief executive officer, James I. Tankersley, and his family to acquire the
remaining shares of the Company's Common Stock that are not already owned by Mr.
Tankersley, his wife or their children (the "Jim Tankersley Family"), in a
merger in which the other stockholders would receive $3.00 per share. On
receiving the proposal, the Board of Directors

                                        8
<PAGE>   9

of the Company appointed two outside directors to a special committee. The Board
designated the committee for the purpose of evaluating and making
recommendations with respect to the proposal. After receiving the recommendation
of the special committee, on May 14, 1999, the Company entered into an Agreement
and Plan of Merger (the "Merger Agreement") with Pictsweet LLC, a Delaware
limited liability company and UF Acquisition Corp., a wholly-owned subsidiary of
Pictsweet LLC, pursuant to which UF Acquisition Corp. will be merged with and
into the Company with the Company being the surviving corporation and becoming a
wholly-owned subsidiary of the Pictsweet LLC, subject to the conditions set
forth in the Merger Agreement. Pursuant to the Merger Agreement, outstanding
shares of the Company's Common Stock, except for Common Stock held by the Jim
Tankersley Family and Common Stock owned by stockholders who perfect their
appraisal rights in accordance with Delaware law, will be converted into the
right to receive $3.50 per share in cash. If consummated, the Jim Tankersley
Family will directly or indirectly own the entire equity interest of the
Company. The Company has incurred approximately $400,000 of expenses with
respect to the proposed transaction through May 31, 1999.

     The total funds required to pay for the merger consideration of $3.50 per
share to all public shareholders, consummate the other transactions contemplated
by the merger agreement and pay all related fees, costs and expenses are
estimated to be approximately $15,800,000. The sources of the $15,800,000 will
be available cash and borrowings under the Company's $18,000,000 revolving
credit facility. The Company has received a written commitment dated May 21,
1999 from the lender to amend the revolving credit facility by increasing the
total amount available to $35,000,000 and also by changing certain of the
restrictive covenants contained in the credit facility. The Company intends to
execute the amendment to the revolving credit facility prior to the commitment's
expiration date of June 30, 1999. Should the merger not be consummated, the
terms and conditions of the credit facility that existed prior to the amendment
will be restored.

     The Company closed on two term loans during December 1998. One term loan in
the amount of $15,000,000 has a ten year term, provides for monthly principal
and interest payments based on a twelve year amortization, with an interest rate
of 6.8% per annum and is secured by the Company's mushroom farms located in
California, Utah and Oregon. The other term loan in the amount of $10,000,000
has a ten year term, provides for monthly principal and interest payments based
on a fifteen year amortization, with an interest rate of 6.8% per annum and is
secured by the Company's Santa Maria, California vegetable processing facility.
The proceeds of the loans were used to repay the balances outstanding under
existing mortgages on these properties totaling approximately $9,000,000, to
repay the outstanding balance of $3,000,000 on the Company's $3,000,000
revolving credit note, and to repay fully the outstanding balance under the
Company's $18,000,000 revolving credit facility.

     In March 1998, the Company entered into a $10,000,000 credit facility to
support the acquisition of trucks, trailers and similar equipment. The agreement
was terminated during March 1999 and all outstanding borrowings under the
facility, which totaled approximately $740,000, were repaid. Another $10,000,000
credit facility was entered into with a different lender during March 1999.
Interest under the terms of the new facility will be 225 basis points over the
yield for treasuries with a maturity equal to the amortization period of the
equipment being financed. Each loan will be secured by specific equipment and
will be amortized over three to seven years, depending on the type of equipment.
Through May 31, 1999 the Company had borrowed approximately $3,600,000 under the
terms of this credit facility.

     In April 1999, the Company borrowed $5,400,000 under the terms of a note
that bears interest at 7.73%, has a ten-year term, requires monthly principal
and interest payments, and is secured by certain equipment. Proceeds from the
loan of approximately $3,056,000 were used to purchase equipment that the
Company had previously leased. The balance of the loan proceeds of approximately
$2,344,000 was held as a portion of the Company's available cash at May 31,
1999.

     Operations provided net cash of $2,044,000 during the three months ended
May 31, 1999 and $11,361,000 during the same period of the prior year. Changes
in inventories resulted in a decrease in cash of $3,920,000 during the three
months ended May 31, 1999 and a cash increase of $2,073,000 during the same
period of the prior year. Adverse weather conditions during the first quarter of
the prior year resulted in less

                                        9
<PAGE>   10

than expected packs while favorable weather conditions resulted in increased
inventories during the current year.

     Investing activities used cash of $2,243,000 for the three months ended May
31, 1999 compared with cash used of $2,110,000 during the same period of the
prior year, with the only investing activity being capital expenditures for each
period.

     Financing activities provided cash of $4,936,000 for the three months ended
May 31, 1999 as compared with cash used of $6,725,000 during the same period of
the prior year. For the three months ended May 31, 1999 the Company borrowed
approximately $3,600,000, as previously mentioned, under the terms of a credit
facility used for the acquisition of certain equipment. Further, the Company
borrowed $5,400,000, as previously mentioned, to acquire certain equipment that
the Company had previously leased for a purchase price of approximately
$3,056,000. The purchase price was disbursed directly to the seller, therefore,
only the net proceeds to the Company are reflected as proceeds from long-term
borrowings in the statement of cash flows.

     Working capital at May 31, 1999 was $43,399,000 and was $39,585,000 at
February 28, 1999. The increase results primarily from changes in cash and
inventories, previously mentioned.

     The Company's ratio of debt to equity increased to 1.82 to 1 at May 31,
1999 from 1.67 to 1 at February 28, 1999, primarily as a result of additional
long-term debt incurred by the Company during the three months ended May 31,
1999.

     A complaint was filed by a stockholder of the Company on March 8, 1999,
against the Company and its directors in a Delaware Court of Chancery. The
complaint seeks class action status and alleges (among other things) that the
defendants breached their fiduciary duties to the Company's stockholders with
respect to the proposal by the Jim Tankersley Family to acquire the remaining
shares of the Company's Common Stock that are not owned by them. The complaint
requests an injunction prohibiting the consummation of the transaction, damages
and other relief. A second complaint was filed by a stockholder of the Company
on May 3, 1999, against the Company and its directors in a Delaware Court of
Chancery. This complaint also seeks class action status, makes similar
allegations with respect to the transaction and requests similar relief.

CAPITAL EXPENDITURES

     Capital expenditures, on an accrual basis, are estimated to be
approximately $17,500,000 for fiscal 2000, which is approximately $9,100,000
more than depreciation expense projected for fiscal 2000. Capital expenditures
anticipated for fiscal 2000 include outlays to be funded under the terms of the
$10,000,000 credit facility, previously mentioned, as well as for improvements
to the Company's plants, equipment and technological systems, and the purchase
of certain leased equipment, previously mentioned. The Company's capital
expenditure plan may change from time to time and the actual amount spent may
vary materially from amounts anticipated herein.

YEAR 2000 ISSUES

     The Company believes it has developed a comprehensive strategy for updating
its systems for Year 2000 ("Y2K") compliance. The Company's information
technology ("IT") systems include in-house developed software, as well as
software purchased from third parties. All software has been identified and
assessed to determine the extent of renovations required in order to be Y2K
compliant. Renovations to programs that utilize in-house developed computer code
are complete and have been validated. The Company believes vendor developed
software will be made Y2K compliant before the end of the current calendar year
through vendor-provided updates or replacement with other Y2K compliant hardware
and software.

     The Company has identified significant non-IT systems which may be impacted
by the Y2K problem, including those relating to production, processing, storage,
and communication equipment, and is in the process of determining through
inquiries of equipment suppliers, as well as testing of such equipment, the
extent of renovations required, if any. The Company believes the assessment will
be completed before the end

                                       10
<PAGE>   11

of the Company's second quarter, and that renovation, validation and
implementation will be completed before the end of the current calendar year.

     The Company has identified third parties with which it has a significant
relationship that, in the event of a Y2K failure, could have a material impact
on the Company's financial position or operating results. The third parties
include energy and utility suppliers, creditors, material and product suppliers,
communication vendors, including value-added network vendors, and the Company's
significant customers. These relationships, especially those associated with
certain suppliers and customers, are material to the Company and a Y2K failure
for one or more of these parties could result in a material adverse effect on
the Company's operating results and financial position. The Company is making
inquiries of these third parties to assess their Y2K readiness. The Company
expects that this process will be on-going throughout the remainder of the
current calendar year.

     The Company expects that the costs to address the Y2K issues will total
approximately $600,000, of which approximately $500,000 (approximately 35% of
fiscal 1999 management information system expense) was spent in fiscal 1999. The
remainder will be spent during the first three quarters of fiscal 2000. These
costs include salary and fringe benefits for personnel, hardware and software
costs, and consulting and travel expenses associated, directly or indirectly,
with addressing Y2K issues. Y2K issues have received a high priority within the
Company and, as a result, certain other IT projects have been delayed. While
such non-Y2K projects are expected to enhance operational efficiencies and
improve the quality of information available to management, the delay of such
projects is not expected to have material impact on the Company's operations.

     The impact of Y2K scenarios could be limited to insignificant matters such
as a minor interruption in production or shipping resulting from unanticipated
problems encountered in the IT systems of the Company, or any of the significant
third parties with whom the company does business. The pervasiveness of the Y2K
issue makes it likely that previously unidentified issues will require
remediation during the normal course of business. In such a case, the Company
anticipates that transactions could be processed manually while IT and other
systems are repaired, and that such interruptions would have a minor effect on
the Company's operations. Worst case Y2K scenarios could be as catastrophic as
an extended loss of utility service resulting from interruptions at the point of
power generation, long-line transmission, or local distribution to the Company's
processing and storage facilities. Such an interruption could result in an
inability to provide products to the Company's customers, as well as impairment
of the Company's production capabilities and its fresh and frozen inventories,
resulting in a material adverse effect on the Company's operating results and
financial position.

RESULTS OF OPERATIONS

OVERVIEW AND TRENDS

     The Company's product line is made up of agricultural products which are
subject to the cyclical conditions and risks inherent in the agricultural
industry. The Company bears part of the growing risks and all of the processing
and marketing risks of these agricultural products. Weather abnormalities and
excess inventories sometimes cause substantial reductions in the annual volume
of product processed in the Company's facilities. When this happens, the unit
cost of that year's production will increase substantially, resulting in reduced
profit margins for one or more years. On the other hand, when bumper crops occur
unit costs may decrease but selling prices will, in general, be depressed.

     The Company is faced with strong competition in the marketplace from large
brand name competitors, private regional U.S. growers and processors, and
privately-owned Mexican and Canadian growers and processors. These competitive
pressures, coupled with low overall growth and retail grocery consolidation,
have led to weak market pricing, and a substantial increase in trade spending
required for the Company to maintain its market position. These factors have
adversely impacted earnings in certain prior periods and, as a result, certain
discretionary repair and maintenance projects were deferred to later periods.
The Company anticipates that these competitive conditions will continue.

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     The Company believes that recently imposed interim tariffs on imported
canned mushrooms from certain countries may have had the effect of increasing
prices and profitability for this portion of the Company's product line. In
cases involving imported canned mushrooms from Chile, India, Indonesia and
China, the tariff has been approved for a five-year period. It is anticipated
that any effect of such tariffs might be temporary, due to world wide shifts in
production and distribution of mushrooms resulting from the tariffs.

     The Company believes that, in order to address the intense competition
within its industry, it must improve its operational efficiency, lower its
costs, improve its customer service and provide value-added services to its
customers. Accordingly, the Company intends to continue to invest in maintaining
and expanding its distribution base and to make substantial expenditures to
maintain and improve its plants, equipment and technological systems. The
Company believes these expenditures are necessary to keep its business
competitive and will fund such spending during periods when earnings are
available. As a result, the Company expects that its future net income may be
adversely affected during certain periods.

     In addition to general inflation and the growing, processing and marketing
risks described above, the Company is facing the significant costs associated
with governmental regulation, the loss of land and water available for
agriculture in California and the increasing competition due to world wide
facilitation of trade, notwithstanding the impact of the previously mentioned
tariff on certain imported canned mushrooms. As a result of these factors, the
Company's earnings are subject to fluctuations and will continue to be so for
the foreseeable future.

     The effect on the Company's operations and its ability to withstand the
costs of developing healthcare, OSHA, EPA, taxation and other governmental
regulations is unknown.

REVENUES

     Net sales and service revenue decreased $2,414,000 (4.8%); sales volume
decreased 4.5% and the average per pound selling price decreased .3% for the
three months ended May 31, 1999, as compared with the same period of the prior
year. Excluding the effect of sales to other food processors, sales volume
decreased 6.3% and the average per pound selling price increased 1.0% for the
quarter ended May 31, 1999, as compared with the same prior year period. The
sales volume decrease for the three months ended May 31, 1999, as compared with
the same period of the prior year, is primarily attributable to competitive
market conditions. Sales allowances decreased $382,000 (4.0%), primarily as a
result of the sales volume decrease previously mentioned.

COST OF SALES AND SERVICES

     Gross profit decreased $229,000 (2.4%) for the quarter ended May 31, 1999,
as compared with the same period of the prior year and the gross margin
increased to 19.3% from 18.8%. The decrease in gross profit results primarily
from the decreased sales volumes, previously mentioned. The gross margin
improvement is attributable to the increased average per pound selling price, as
well as improved production costs, as compared with the prior year. The gross
profit method, at the estimated annual gross profit rate, is used to determine
frozen vegetable cost of goods sold in interim financial statements (See Note
3 -- Notes to Financial Statements). Cost of sales and services decreased
$2,185,000 (5.4%) for the three months ended May 31, 1999, as compared with the
same period of the prior year, primarily as the result of the sales volume
decrease, previously mentioned, and improved production costs, previously
mentioned.

SELLING, ADMINISTRATIVE AND GENERAL EXPENSES

     Selling, general and administrative expenses decreased $360,000 (4.4%) for
the quarter compared with the same period of the prior year. Storage expense
decreased $352,000 (13.8%) for the quarter as compared with the same period of
the prior year, primarily as the result of repairs to the Company's cold storage
facilities during the prior fiscal year.

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INTEREST EXPENSE

     Interest expense -- net increased $165,000 (18.6%) for the quarter ended
May 31, 1999, as compared with the prior year, primarily as the result of
increased borrowings which were incurred during December 1998 and during the
three months ended May 31, 1999, previously mentioned. The effect of the
additional borrowings was somewhat mitigated by lower average interest rates on
the Company's borrowings.

TAXES ON INCOME

     Taxes on income for the three months ended May 31, 1999 and 1998 consist of
current and deferred taxes provided at the estimated effective federal and state
tax rates expected to be recognized for the respective periods. (See Note
4 -- Notes to Financial Statements.)

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                          PART II -- OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a) Exhibits -- 27 Financial Data Schedule (for SEC use only)
        (b) Reports on Form 8-K
            The Company filed a Form 8-K dated March 18, 1999, disclosing that a
            Complaint was filed against the Company and its directors by a
            stockholder of the Company in a Delaware Court of Chancery with
            respect to the proposal by the Jim Tankersley Family.

            The Company filed a Form 8-K dated May 19, 1999, disclosing that the
            Company had entered into an Agreement and Plan of Merger, dated as
            of May 14, 1999, by and between the Company, Pictsweet LLC and UF
            Acquisition Corp.

                                   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 thereunto duly authorized.

                                          UNITED FOODS, INC.

                                          By: /s/ CARL W. GRUENEWALD, II

                                            ------------------------------------
                                            Carl W. Gruenewald, II
                                            Senior Vice President,
                                            Chief Financial Officer & Treasurer

Date: June 25, 1999

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