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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

|     |  |                                                                                         
|---- |  | ----------------------------------------------------------------------------------------
|[X]  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|     |  |                                                                                         
|     |  | For the quarterly period ended: December 27, 2003                                       
|     |  |                                                                                         
|     |  | OR                                                                                      
|     |  |                                                                                         
|[  ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to

Commission file number: 333-64180

PSF Group Holdings, Inc.

(Exact name of Registrant as specified in its charter)


|                                                                      |  |                                                
|--------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
State or other jurisdiction of
incorporation or organization |  | 43-1818535
(I.R.S. Employer Identification No.)

|                                                                                           |  |                 
|------------------------------------------------------------------------------------------ |  | ----------------
|805 Pennsylvania, Suite 200, Kansas City, Missouri
(Address of principal executive office) |  | 64105
(Zip Code)

Registrants telephone number, including area code: (816) 472-7675

Not Applicable




(Former name, former address and former fiscal year, if
changed since last report)

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

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [  ] No [X]

As of December 27, 2003, there were 100,000 shares of the Registrants
Class A Common Stock outstanding and 113,301 shares of the Registrants Class B
Common Stock outstanding.





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TABLE OF CONTENTS



|                               |                                                                                               |                                                                        |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- |  |  |  |  |  | 
|PART I - FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | Condensed Consolidated Balance Sheets                                 
|                               |                                                                                               | Condensed Consolidated Statements of Operations and Comprehensive Loss
|                               |                                                                                               | Condensed Consolidated Statements of Cash Flows                       
|                               |                                                                                               | Notes to Condensed Consolidated Financial Statements                  
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3. Qualitative and Quantitative Disclosures About Market Risk                           
|                               | Item 4. Controls and Procedures                                                              
|PART II  OTHER INFORMATION   
|                               | Item 1. Legal Proceedings                                                                    
|                               | Item 2. Changes in Securities                                                                
|                               | Item 3. Defaults Upon Senior Securities                                                      
|                               | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                               | Item 5. Other Information                                                                    
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                    
|EX-31.1: CERTIFICATION        
|EX-31.2: CERTIFICATION        
|EX-32.1: CERTIFICATION        
|EX-32.2: CERTIFICATION        



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PART I - FINANCIAL INFORMATION




Item 1. Financial Statements




PSF Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 27, 2003 and March 29, 2003
(in 000s)
(Unaudited)

|                                               |                                                            |                                                     |         |              |         |           |         |         |         | 
|---------------------------------------------- | ---------------------------------------------------------- | --------------------------------------------------- | ------- | ------------ | ------- | --------- | ------- | ------- | ------- | 
|                                               |                                                            |                                                     |         | December 27, |         | March 29,
|                                               |                                                            |                                                     |         | 2003         |         | 2003     
|                                               |                                                            |                                                     |         |              |         |          
|ASSETS                                         |                                                            |                                                     |         |              |         |           |         |        
|CURRENT ASSETS:                                |                                                            |                                                     |         |              |         |           |         |        
|                                               | Accounts receivable, net                                   |                                                     | $       | 29,825       |         |           | $       | 21,907  |        
|                                               | Inventories                                                |                                                     |         | 160,969      |         |           |         | 158,402 |        
|                                               | Federal income tax receivable                              |                                                     |         | 175          |         |           |         | 4,525   |        
|                                               | Deferred income taxes                                      |                                                     |         | 13,268       |         |           |         | 13,064  |        
|                                               | Prepaid expenses and other                                 |                                                     |         | 2,928        |         |           |         | 2,341   |        
|                                               |                                                            |                                                     |         |              |         |           |         |         |        
|                                               |                                                            | Total current assets                                |         |              | 207,165 |           |         |         | 200,239 | 
|PROPERTY, PLANT, EQUIPMENT AND BREEDING STOCK: |                                                            |                                                     |         |              |         |           |         |        
|                                               | Land and improvements                                      |                                                     |         | 101,132      |         |           |         | 100,510 |        
|                                               | Buildings                                                  |                                                     |         | 293,967      |         |           |         | 293,538 |        
|                                               | Machinery and equipment                                    |                                                     |         | 272,632      |         |           |         | 266,268 |        
|                                               | Breeding stock                                             |                                                     |         | 39,114       |         |           |         | 36,672  |        
|                                               | Construction in progress                                   |                                                     |         | 7,498        |         |           |         | 4,287   |        
|                                               |                                                            |                                                     |         |              |         |           |         |         |        
|                                               |                                                            |                                                     | 714,343 |              |         |           | 701,275 |        
|                                               | Less- accumulated depreciation                             |                                                     |         | 249,474      |         |           |         | 213,314 |        
|                                               |                                                            |                                                     |         |              |         |           |         |         |        
|                                               |                                                            | Total property, plant, equipment and breeding stock |         |              | 464,869 |           |         |         | 487,961 | 
|GOODWILL                                       |                                                            |                                                     | 75,998  |              |         |           | 75,998  |        
|OTHER LONG-TERM ASSETS:                        |                                                            |                                                     |         |              |         |           |         |        
|                                               | Deferred financing costs, net                              |                                                     |         | 5,772        |         |           |         | 7,085   |        
|                                               | Other                                                      |                                                     |         | 8,059        |         |           |         | 7,779   |        
|                                               |                                                            |                                                     |         |              |         |           |         |         |        
|                                               |                                                            | Total other long-term assets                        |         |              | 13,831  |           |         |         | 14,864  | 
|Total assets                                   |                                                            | $                                                   | 761,863 |              |         | $         | 779,062 |        
|                                               |                                                            |                                                     |         |              |         |           |         |         |        
|LIABILITIES AND SHAREHOLDERS EQUITY           |                                                            |                                                     |         |              |         |           |         |        
|CURRENT LIABILITIES:                           |                                                            |                                                     |         |              |         |           |         |        
|                                               | Checks issued against future deposits                      |                                                     | $       | 5,412        |         |           | $       | 5,129   |        
|                                               | Accounts payable                                           |                                                     |         | 15,712       |         |           |         | 6,581   |        
|                                               | Accrued expenses                                           |                                                     |         | 34,610       |         |           |         | 28,576  |        
|                                               | Due to related party                                       |                                                     |         | 28           |         |           |         | 979     |        
|                                               | Accrued interest                                           |                                                     |         | 1,924        |         |           |         | 6,178   |        
|                                               | Current maturities of long-term debt and capital leases    |                                                     |         | 75,818       |         |           |         | 13,273  |        
|                                               |                                                            |                                                     |         |              |         |           |         |         |        
|                                               |                                                            | Total current liabilities                           |         |              | 133,504 |           |         |         | 60,716  | 
|LONG-TERM LIABILITIES:                         |                                                            |                                                     |         |              |         |           |         |        
|                                               | Long-term debt and capital leases, less current maturities |                                                     |         | 202,719      |         |           |         | 291,911 |        
|                                               | Other long-term liabilities                                |                                                     |         | 6,688        |         |           |         | 6,345   |        
|                                               | Deferred income taxes                                      |                                                     |         | 75,471       |         |           |         | 75,795  |        
|                                               |                                                            |                                                     |         |              |         |           |         |         |        
|                                               |                                                            | Total long-term liabilities                         |         |              | 284,878 |           |         |         | 374,051 | 
|                                               |                                                            |                                                     |         |              |         |           |         |         |        
|                                               |                                                            | Total liabilities                                   |         |              | 418,382 |           |         |         | 434,767 | 
|SHAREHOLDERS EQUITY:                          |                                                            |                                                     |         |              |         |           |         |        
|                                               | Common stock                                               |                                                     |         | 2            |         |           |         | 2       |        
|                                               | Additional paid-in capital                                 |                                                     |         | 373,708      |         |           |         | 373,693 |        
|                                               | Accumulated other comprehensive loss, net of tax           |                                                     |         | (102         | )       |           |         | (347    | )      
|                                               | Accumulated deficit                                        |                                                     |         | (30,127      | )       |           |         | (29,053 | )      
|                                               |                                                            |                                                     |         |              |         |           |         |         |        
|                                               |                                                            | Total shareholders equity                          |         |              | 343,481 |           |         |         | 344,295 | 
|Total liabilities and shareholders equity     |                                                            | $                                                   | 761,863 |              |         | $         | 779,062 |        
|                                               |                                                            |                                                     |         |              |         |           |         |         |        

The accompanying notes are an integral part of the condensed consolidated financial statements.

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PSF Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Loss
13 and 39 weeks ended December 27, 2003 and December 28, 2002
(in 000s)
(Unaudited)

|                                             |                                                          |   |                |        |                |   |              |         |              |   |         |        |   |   |         |         |  
|-------------------------------------------- | -------------------------------------------------------- | - | -------------- | ------ | -------------- | - | ------------ | ------- | ------------ | - | ------- | ------ | - | - | ------- | ------- | -
|                                             |                                                          |   | 13 Weeks Ended |        | 39 Weeks Ended
|                                             |                                                          |   |                |        |               
|                                             |                                                          |   | December 27,   |        | December 28,   |   | December 27, |         | December 28,
|                                             |                                                          |   | 2003           |        | 2002           |   | 2003         |         | 2002        
|                                             |                                                          |   |                |        |                |   |              |         |             
|Net sales                                    |                                                          | $ | 199,766        |        |                | $ | 154,090      |         |              | $ | 549,207 |        |   | $ | 448,874 |        
|Cost of goods sold                           |                                                          |   | 190,723        |        |                |   | 163,393      |         |              |   | 520,002 |        |   |   | 462,818 |        
|                                             |                                                          |   |                |        |                |   |              |         |              |   |         |        |   |   |         |        
|                                             | Gross profit                                             |   |                | 9,043  |                |   |              | (9,303  | )            |   |         | 29,205 |   |   |         | (13,944 | )
|Selling, general and administrative expenses |                                                          |   | 4,431          |        |                |   | 4,530        |         |              |   | 12,658  |        |   |   | 13,503  |        
|Other (income) loss                          |                                                          |   | (179           | )      |                |   | 215          |         |              |   | (461    | )      |   |   | (531    | )      
|                                             |                                                          |   |                |        |                |   |              |         |              |   |         |        |   |   |         |        
|                                             | Operating income (loss)                                  |   |                | 4,791  |                |   |              | (14,048 | )            |   |         | 17,008 |   |   |         | (26,916 | )
|Interest expense (income):                   |                                                          |   |                |        |                |   |              |         |              |   |         |        |   |   |         |        
|                                             | Interest expense                                         |   |                | 6,065  |                |   |              | 6,044   |              |   |         | 18,868 |   |   |         | 17,434  |  
|                                             | Interest income                                          |   |                | (45    | )              |   |              | (38     | )            |   |         | (100   | ) |   |         | (129    | )
|                                             |                                                          |   |                |        |                |   |              |         |              |   |         |        |   |   |         |        
|Interest expense, net                        |                                                          |   | 6,020          |        |                |   | 6,006        |         |              |   | 18,768  |        |   |   | 17,305  |        
|                                             |                                                          |   |                |        |                |   |              |         |              |   |         |        |   |   |         |        
|                                             | Income (loss) before income taxes                        |   |                | (1,229 | )              |   |              | (20,054 | )            |   |         | (1,760 | ) |   |         | (44,221 | )
|                                             | Income tax expense (benefit)                             |   |                | (478   | )              |   |              | (7,801  | )            |   |         | (685   | ) |   |         | (17,202 | )
|                                             |                                                          |   |                |        |                |   |              |         |              |   |         |        |   |   |         |        
|Net loss                                     |                                                          | $ | (751           | )      |                | $ | (12,253      | )       |              | $ | (1,075  | )      |   | $ | (27,019 | )      
|                                             | Unrealized gain (loss) on interest rate swap, net of tax |   |                | 76     |                |   |              | 16      |              |   |         | 245    |   |   |         | (749    | )
|                                             |                                                          |   |                |        |                |   |              |         |              |   |         |        |   |   |         |        
|Comprehensive loss                           |                                                          | $ | (675           | )      |                | $ | (12,237      | )       |              | $ | (830    | )      |   | $ | (27,768 | )      
|                                             |                                                          |   |                |        |                |   |              |         |              |   |         |        |   |   |         |        

The accompanying notes are an integral part of the condensed consolidated financial statements.

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PSF Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
39 Weeks ended December 27, 2003 and December 28, 2002
(in 000s)
(Unaudited)

|                                                                            |                                                                          |                                                          |         |              |        |              |         |         |         |  
|--------------------------------------------------------------------------- | ------------------------------------------------------------------------ | -------------------------------------------------------- | ------- | ------------ | ------ | ------------ | ------- | ------- | ------- | -
|                                                                            |                                                                          |                                                          |         | December 27, |        | December 28,
|                                                                            |                                                                          |                                                          |         | 2003         |        | 2002        
|                                                                            |                                                                          |                                                          |         |              |        |             
|OPERATING ACTIVITIES:                                                       |                                                                          |                                                          |         |              |        |              |         |        
|                                                                            | Net loss                                                                 |                                                          | $       | (1,075       | )      |              | $       | (27,019 | )      
|Adjustments to reconcile net loss
to net cash used in operating activities: |                                                                          |                                                          |         |              |        |              |         |        
|                                                                            | Depreciation                                                             |                                                          |         | 46,089       |        |              |         | 46,134  |        
|                                                                            | Amortization of deferred financing costs                                 |                                                          |         | 1,313        |        |              |         | 1,109   |        
|                                                                            | Deferred income taxes                                                    |                                                          |         | (528         | )      |              |         | (16,723 | )      
|                                                                            | Net (gain) loss on sale of property, plant, equipment and breeding stock |                                                          |         | (3,085       | )      |              |         | 1,536   |        
|                                                                            | Changes in operating assets and liabilities, net:                        |                                                          |         |              |        |              |         |         |        
|                                                                            |                                                                          | Accounts receivable                                      |         |              | (7,918 | )            |         |         | (3,528  | )
|                                                                            |                                                                          | Inventories                                              |         |              | (2,567 | )            |         |         | (17,587 | )
|                                                                            |                                                                          | Prepaid expenses and other assets                        |         |              | 3,728  |              |         |         | (1,015  | )
|                                                                            |                                                                          | Accounts payable, accrued expenses and other liabilities |         |              | 10,318 |              |         |         | (3,269  | )
|                                                                            |                                                                          |                                                          |         |              |        |              |         |         |        
|Net cash provided by (used in) operating activities                         |                                                                          |                                                          | 46,275  |              |        |              | (20,362 | )      
|INVESTING ACTIVITIES:                                                       |                                                                          |                                                          |         |              |        |              |         |        
|                                                                            | Purchases of property, plant, equipment and breeding stock               |                                                          |         | (33,474      | )      |              |         | (24,405 | )      
|                                                                            | Proceeds from disposal of property, plant, equipment and breeding stock  |                                                          |         | 13,563       |        |              |         | 8,015   |        
|                                                                            |                                                                          |                                                          |         |              |        |              |         |         |        
|Net cash used in investing activities                                       |                                                                          |                                                          | (19,911 | )            |        |              | (16,390 | )      
|FINANCING ACTIVITIES:                                                       |                                                                          |                                                          |         |              |        |              |         |        
|                                                                            | Checks issued against future deposits                                    |                                                          |         | 283          |        |              |         | 3,692   |        
|                                                                            | (Payments on) proceeds from revolving debt, net                          |                                                          |         | (19,799      | )      |              |         | 41,229  |        
|                                                                            | Payments for deferred financing costs                                    |                                                          |         |             |        |              |         | (1,390  | )      
|                                                                            | Repayments on long-term debt                                             |                                                          |         | (6,848       | )      |              |         | (13,961 | )      
|                                                                            |                                                                          |                                                          |         |              |        |              |         |         |        
|Net cash (used in) provided by financing activities                         |                                                                          |                                                          | (26,364 | )            |        |              | 29,570  |        
|Net decrease in cash and cash equivalents                                   |                                                                          |                                                          |        |              |        |              | (7,182  | )      
|CASH AND CASH EQUIVALENTS, beginning of period                              |                                                                          |                                                          |        |              |        |              | 7,182   |        
|                                                                            |                                                                          |                                                          |         |              |        |              |         |         |        
|CASH AND CASH EQUIVALENTS, end of period                                    |                                                                          | $                                                        |        |              |        | $            |        |        
|                                                                            |                                                                          |                                                          |         |              |        |              |         |         |        
|SUPPLEMENTAL DISCLOSURES:                                                   |                                                                          |                                                          |         |              |        |              |         |        
|                                                                            | Interest paid                                                            |                                                          | $       | 21,724       |        |              | $       | 18,571  |        
|                                                                            | Income tax paid, net of refunds received                                 |                                                          |         | 2            |        |              |         | 5       |        

The accompanying notes are an integral part of the condensed consolidated financial statements.

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PSF Group Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

Note 1  Basis of presentation

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the accounting policies described in the
consolidated financial statements and related notes included in PSF Group
Holdings, Inc. and Subsidiaries (the Company) consolidated financial
statements for the year ended March 29, 2003 filed with the Securities and
Exchange Commission on Form 10-K. It is suggested that this report be read in
conjunction with those consolidated statements. Certain information and note
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. The year-end financial statements
presented were derived from the Companys audited financial statements. In the
opinion of management, the accompanying condensed consolidated financial
statements reflect all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the financial position of the
Company and the results of its operations.

PSF Group Holdings, Inc. is a Delaware company formed in 1998 and is currently
53% owned by ContiGroup Companies, Inc.

Note 2  Stock-based compensation

The Company adopted the disclosure provisions of Statement of Financial
Accounting Standards No. 148 (SFAS 148), Accounting for Stock-Based
Compensation  Transition and Disclosure, an amendment of FASB Statement No.
123. SFAS 148 requires prominent disclosures in both annual and interim
financial statements regarding the method of accounting for stock-based
employee compensation and the effect of the method used on reported results.

In the fiscal year ended March 31, 2001, the Companys board of directors
authorized an equity incentive plan whereby options have been granted to senior
management for the purchase of 6,857 shares of Class B common stock at an
exercise price of $1,666.48 per share. Substantially all of the options are
fully exercisable at December 27, 2003. At December 31, 2005, 6,143 options
expire and the remaining options expire at December 31, 2007. No options have
been exercised as of December 27, 2003. The Companys board recently approved
the issuance of an additional 857 options for shares of Class B common stock at
an exercise price of $1,666.48 per share. These options had not been awarded
as of December 27, 2003.

The Company records stock compensation in accordance with Accounting Principles
Board Opinion No. 25 (APB 25). For the quarter and 39 weeks ended December 27,
2003, the Company recorded compensation expense of $5,000 and $15,000,
respectively, in accordance with APB 25. The pro-forma disclosures required by
SFAS 148 have not been included as they did not result in a material pro-forma
impact on the financial statements.

Note 3  New accounting pronouncements

Asset retirement
obligations
On June 30, 2001 the Financial Accounting Standards Board (FASB) issued its
Statement of Financial Accounting Standards No. 143 (SFAS 143), Accounting for
Asset Retirement Obligations. SFAS 143 applies to legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development, and the normal operation of long-lived
assets. This statement requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is incurred
if a reasonable estimate of fair value can be made. The associated asset
retirement costs are capitalized as part of the carrying amount of the
long-lived asset. This statement is effective for

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financial statements issued for fiscal years beginning after June 15, 2002 and
was adopted by the Company March 30, 2003. The Company has determined that it
has a legal obligation to close lagoons in the future should the Company ever
cease operations or plan to close lagoons voluntarily in accordance with a
changed operating plan. Based on estimates and assumptions as to the cost and
timing of any potential lagoon closure, the Company has determined and recorded
the present value of the projected costs which are not considered material to
the condensed consolidated financial statements. However, should laws,
assumptions or other circumstances change which require lagoon closure before
the periods assumed in the present value calculations, the costs could have a
material impact on the consolidated financial statements in the period the
change occurs.

In January 2003, the FASB issued FASB Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities. FIN 46 applies to entities if
its total equity at risk is not sufficient to permit the entity to finance its
activities without additional subordinated support or if the equity investors
lack certain characteristics of a controlling financial interest. If an entity
is determined to meet those certain characteristics, FIN 46 requires a test to
identify the primary beneficiary based on expected losses and expected returns
associated with the variable interest. The primary beneficiary is then
required to consolidate the entity. The consolidation requirements apply to
all variable interest entities (VIEs) created after January 31, 2003. For VIEs
created prior to February 1, 2003, the FASB issued FASB Interpretation No. 46
(revised December 2003) which extends the effective date of FIN 46 to the first
reporting period ending after March 15, 2004. Management has concluded that we
have not created or obtained any VIEs subsequent to January 31, 2003 that would
require consolidation. Management does not believe the adoption of FIN 46 will
have a material impact on the Companys consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150 (SFAS 150), Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity.
SFAS 150 provides guidance on how an entity classifies and measures certain
financial instruments with characteristics of both liabilities and equity.
SFAS 150 is effective for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003, except that certain provisions have been
deferred pursuant to FASB Staff Position 150-3. The adoption of SFAS 150 did
not have a material impact on our consolidated financial statements.

Note 4  Derivative instruments and hedging activities

The Company follows FASB Statement No. 133 (SFAS 133), Accounting for
Derivative Instruments and Hedging Activities which requires every derivative
instrument be recorded in the balance sheet as either an asset or liability at
its fair value, and changes in a derivatives fair value be recognized in
current earnings or other comprehensive income.

The Company believes that its exchange traded commodity contracts serve as
economic hedges, however, management has elected not to designate and account
for these contracts as hedges. Accordingly, these contracts are marked to
market through earnings. For the quarter ended December 27, 2003, the Company
recognized gains under SFAS 133 of $6.8 million in net sales for gains related
to lean hog futures and gains of $1.8 million in costs of goods sold relating
to the hedging of feed components and outside hog purchases at processing
facilities. For the 39 weeks ended December 27, 2003, the Company has
recognized gains under SFAS 133 of $5.8 million in net sales for gains related
to lean hog futures and gains of $3.0 million in costs of goods sold relating
to the hedging of feed components and outside hog purchases at processing
facilities. The Company has recorded the fair value of its open exchange
traded commodity contracts of $1.9 million and $1.5 million in Prepaid Expenses
and Other in the condensed consolidated balance sheet at December 27, 2003 and
March 29, 2003, respectively.

The Company holds an interest rate swap agreement in order to effectively
convert the base interest rate on the bank term note from variable to a fixed
rate. The Company has designated the interest rate swap as a cash flow hedge
and for the quarter ended December 27, 2003, recorded the fair value of
($166,000) in the condensed consolidated balance sheet relating to the swap.
For the quarter ended December 27, 2003, $76,000, net of $48,000 in income
taxes, included in comprehensive losses was reclassified to interest expense.
For the 39 weeks ended December 27, 2003, $245,000, net of $156,000 in income
taxes, included

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in comprehensive losses was reclassified to interest expense. The interest
rate swap will mature on September 30, 2004.

Note 5  Goodwill and intangible assets

The Company follows Statements of Financial Accounting Standards No. 142 (SFAS
142), Goodwill and Intangible Assets, which established reporting and
accounting standards for goodwill and intangible assets. Under SFAS 142,
companies no longer amortize goodwill over the estimated useful life. Goodwill
is assessed each year during the second quarter for impairment by applying a
fair value based test. No impairment value was recorded during the third
quarter ended December 27, 2003.

Note 6  Inventories

Inventories are valued at the lower of cost, determined on a first-in,
first-out (FIFO) basis, or market. Inventories consist of the following (in
thousands):

|                                |                   |   |                |  |  |   |         | 
|------------------------------- | ----------------- | - | -------------- |  |  | - | ------- | 
|                                | December 27, 2003 |   | March 29, 2003
|                                |                   |   |               
|Hogs                            |                   | $ | 147,842        |  |  | $ | 142,675 | 
|Processed pork products         |                   |   | 7,009          |  |  |   | 9,568   | 
|Packaging and supplies          |                   |   | 2,432          |  |  |   | 2,822   | 
|Grain, feed additives and other |                   |   | 3,686          |  |  |   | 3,337   | 
|                                |                   |   |                |  |  |   |         | 
|                                |                   | $ | 160,969        |  |  | $ | 158,402 | 
|                                |                   |   |                |  |  |   |         | 

Note 7  Segment information

The accounting policies for the Companys business segments are the same as
those described in the footnotes included in the Companys March 29, 2003
audited financial statements. The Company operates a vertically integrated
business with two operating segments, Pork Processing and Hog Production. The
Pork Processing segment sells fresh and value-added pork products to food
retailers, distributors, wholesalers, further processors, pharmaceutical and
animal feed manufacturers in both domestic and international markets. The Hog
Production segment supplies a majority of the live hogs used in the Pork
Processing segment and sells the excess production to other hog processing
operations. Intersegment live hog sales are based on market prices. The
following table presents specific financial information about each segment as
reviewed by the Companys management. The Corporate and Other classification
in the following table represents unallocated corporate expenses and assets,
deferred and current income taxes, interest expense and intersegment
elimination (in thousands):

|                                                    |                         |  |            |         |            |  |           |          |       |  |   |          |   |  |   |         |  
|--------------------------------------------------- | ----------------------- |  | ---------- | ------- | ---------- |  | --------- | -------- | ----- |  | - | -------- | - |  | - | ------- | -
|                                                    |                         |  | Pork       |         | Hog        |  | Corporate |          |       |  |  
|                                                    |                         |  | Processing |         | Production |  | and Other |          | Total
|                                                    |                         |  |            |         |            |  |           |          |      
|For the 13 weeks ended December 27, 2003-           |                         |  |            |         |            |  |           |          |       |  |   |          |   |  |   |        
|                                                    | Net sales               |  | $          | 177,897 |            |  | $         | 118,961  |       |  | $ | (97,092  | ) |  | $ | 199,766 |  
|                                                    | Intersegment sales      |  |            | (693    | )          |  |           | (96,399  | )     |  |   |         |   |  |   |        |  
|                                                    | Operating income (loss) |  |            | 14,401  |            |  |           | (6,284   | )     |  |   | (3,326   | ) |  |   | 4,791   |  
|For the 13 weeks ended December 28, 2002-           |                         |  |            |         |            |  |           |          |       |  |   |          |   |  |   |        
|                                                    | Net sales               |  | $          | 141,273 |            |  | $         | 86,307   |       |  | $ | (73,490  | ) |  | $ | 154,090 |  
|                                                    | Intersegment sales      |  |            | (872    | )          |  |           | (72,618  | )     |  |   |         |   |  |   |        |  
|                                                    | Operating income (loss) |  |            | 14,601  |            |  |           | (25,676  | )     |  |   | (2,973   | ) |  |   | (14,048 | )
|As of and for the 39 weeks ended December 27, 2003- |                         |  |            |         |            |  |           |          |       |  |   |          |   |  |   |        
|                                                    | Net sales               |  | $          | 495,457 |            |  | $         | 342,045  |       |  | $ | (288,295 | ) |  | $ | 549,207 |  
|                                                    | Intersegment sales      |  |            | (1,946  | )          |  |           | (286,349 | )     |  |   |         |   |  |   |        |  
|                                                    | Operating income (loss) |  |            | 26,556  |            |  |           | 68       |       |  |   | (9,616   | ) |  |   | 17,008  |  
|                                                    | Assets                  |  |            | 197,867 |            |  |           | 536,395  |       |  |   | 27,601   |   |  |   | 761,863 |  
|                                                    | Goodwill                |  |            | 25,020  |            |  |           | 50,978   |       |  |   |         |   |  |   | 75,998  |  
|For the 39 weeks ended December 28, 2002-           |                         |  |            |         |            |  |           |          |       |  |   |          |   |  |   |        
|                                                    | Net sales               |  | $          | 409,397 |            |  | $         | 261,627  |       |  | $ | (222,150 | ) |  | $ | 448,874 |  
|                                                    | Intersegment sales      |  |            | (2,291  | )          |  |           | (219,859 | )     |  |   |         |   |  |   |        |  
|                                                    | Operating income (loss) |  |            | 25,383  |            |  |           | (43,189  | )     |  |   | (9,110   | ) |  |   | (26,916 | )
|As of March 29, 2003-                               |                         |  |            |         |            |  |           |          |       |  |   |          |   |  |   |        
|                                                    | Assets                  |  | $          | 196,926 |            |  | $         | 549,529  |       |  | $ | 32,607   |   |  | $ | 779,062 |  
|                                                    | Goodwill                |  |            | 25,020  |            |  |           | 50,978   |       |  |   |         |   |  |   | 75,998  |  

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Note 8  Amendments to Credit Agreement

Effective June 28, 2002, the Company and its bank group amended the Credit
Agreement to extend the revolving credit facility one year, increase the letter
of credit commitment from $10.0 million to $15.0 million, and amend certain
financial covenants and pricing terms.

Effective September 27, 2002, the Company and its bank group amended the Credit
Agreement to increase the Companys revolving credit facility by $50.0 million
to $150.0 million in total availability subject to a borrowing base
calculation, among other things. The amendment also deferred quarterly
principal payments on the Companys term debt for a one year period and amended
certain financial covenants. Obligations under the Credit Agreement are
secured by liens on substantially all of the Companys assets. In addition to
customary financial covenants, the Credit Agreement contains restrictions on,
among other things, encumbrance or disposal of assets, acquisitions, additional
indebtedness, capital investment, payment of subordinated debt and construction
of new hog production facilities. In addition to fees payable under credit
facilities of this type, amounts borrowed under the Credit Agreement bear
interest at fluctuating rates selected by the Company. These rates are based
on the agent banks base rate (the greater of the agent banks prime rate or
the federal funds rate plus one half of one percent) or LIBOR plus, in each
case, an applicable margin, currently ranging from 1.5% to 3.125%, determined
by the Companys leverage ratio. All borrowings under the revolving credit
facility mature on August 21, 2004 and the term debt matures on August 21,
2005. Financing costs associated with the amendment have been capitalized and
are being amortized over the life of the amended Credit Agreement.

Note 9  Litigation

Environmental matters

The Company in prior years settled two citizens action suits which sought to
enforce alleged violations of the Clean Air Act, Clean Water Act and CERCLA
against the Company and ContiGroup Companies, Inc. (ContiGroup). The U.S.
Environmental Protection Agency (the E.P.A.) had intervened in this action
and filed a separate notice of violation against the Company under the Clean
Air Act. This settlement, in the form of a consent decree (EPA Consent
Decree), resolved all outstanding issues of ContiGroup and the Company with
the citizens group and the E.P.A. In 1998, the Company engaged in a series of
transactions with ContiGroup pursuant to which it purchased from ContiGroup its
North Missouri Farms hog production operations and ContiGroup purchased a 51.0%
ownership interest in the Company (the 1998 ContiGroup transaction). To the
extent that ContiGroup incurred any liability in this litigation, the Company
assumed that liability pursuant to the terms of the 1998 ContiGroup
transaction. The EPA Consent Decree, built upon the 1999 consent decree with
the State of Missouri referenced below, requires the Company and ContiGroup to
meet certain performance standards, such as a 50 percent reduction in nitrogen
concentration of the effluent applied to area fields over a prescribed time
period. Other key elements of the EPA Consent Decree include: monitoring air
emissions from lagoons and barns; compliance with certain best management
practices to reduce the risk of spills; testing of selective lagoons to ensure
integrity; and the payment of a $350,000 civil penalty. The counsel for the
citizen plaintiffs has submitted a petition for recovery of attorneys fees in
connection with the lawsuits against both the Company and ContiGroup. On
September 10, 2003, the Court issued an order denying the majority of fees
sought by counsel for the citizen plaintiffs, and the Company has settled with
the plaintiffs and their counsel on the balance of the fees, which was
previously accrued for in the Companys financial statements.

In 1999, the Company settled a suit filed by the Attorney General of the State
of Missouri against the Company and ContiGroup. As referenced above, the
Company assumed ContiGroups liability in this action in connection with the
1998 ContiGroup transaction. The settlement required the Company and ContiGroup
to enter into a consent judgment (Missouri Consent Decree) pursuant to which
the Company was obligated to invest $25 million on or before May 19, 2004, for
researching, installing and operating improved technology to control
wastewater, air and odor emissions from its Missouri farms. All such
investments were subject to the approval of a panel of independent university
experts (Expert Panel). In June 2002, the State of Missouri filed a lawsuit
against the Company seeking penalties and injunctive relief

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for additional alleged violations of air and water regulations. The Company
has reached an agreement in principle on a settlement with the State, subject
to final court approval, requiring the Company to pay an additional fine of
$333,000. The settlement also extends the implementation schedule under the
Missouri Consent Decree from 2004 until 2010. In addition, and in lieu of the
$25 million investment commitment and deadline referenced above, the Company
has committed to install improved wastewater, air and odor technology at all of
its finisher farms in northern Missouri, subject to the approval of the Expert
Panel.

Two nuisance suits were filed against ContiGroup and the Company during the
second quarter of fiscal year 2003 in the Circuit Court of Jackson County,
Kansas City, Missouri. There are multiple plaintiffs in each suit, who claim
to live near swine farms owned by ContiGroup but under production contracts
with the Company. Plaintiffs allege that odors from these farms interfered
with the plaintiffs right to use and have quiet enjoyment of their respective
properties. The Company is obligated by contract to indemnify ContiGroup for
any liabilities arising from this litigation. The Company has filed an answer,
believes it has good defenses to these actions, and intends to vigorously
defend these suits.

Other legal matters

In addition, the Company is involved from time to time in routine litigation
incidental to its business. Although no assurance can be given as to the
outcome or expense associated with any of these routine proceedings, the
Company believes that none of such proceedings currently pending should,
individually or in the aggregate, have a material adverse effect on its
financial statements.

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

In this report on Form 10-Q, the terms we, us, and our refer collectively
to PSF Group Holdings, Inc., Premium Standard Farms, Inc. and their
subsidiaries. Premium Standard Farms, Inc. is a wholly-owned subsidiary of PSF
Group Holdings, Inc. The terms expect, anticipate, may, believe,
will, and similar expressions made with respect to our earnings and outlook
for the future contain some forward-looking information. Naturally, all
forward-looking statements involve risk and uncertainty and actual results or
events could be materially different. Although we believe that our
expectations are based on reasonable assumptions, we can give no assurance that
our goals will be achieved. Important factors that could cause actual results
to differ include: economic conditions generally and in our principal markets;
competitive practices and consolidation in the pork production and processing
industries; the impact of current and future laws, governmental regulations and
fiscal policies affecting our industry and operations, including environmental
laws and regulations, trade embargoes and tariffs; domestic and international
transportation disruptions; food safety; the availability of additional capital
to fund future commitments and expansion and the cost and terms of financing;
outbreaks of disease in our herds; feed ingredient costs; fluctuations in live
hog and wholesale pork prices; customer demands and preferences; and the
occurrence of natural disasters and other occurrences beyond our control. In
light of these risks, uncertainties and assumptions, the forward-looking events
discussed might not occur. Please review our Annual Report on Form 10-K for
other important factors that could cause results to differ materially from
those in any such forward-looking statements. Information in these archived
materials may not be current and may be superceded by more recent information
published by us.

General Overview

We are a leading vertically integrated provider of pork products operating
in two industry segments: hog production and pork processing. The hog
production segment controls over 255,000 sows, of which 212,000 are owned, with
operations in Missouri, North Carolina, and Texas. The majority of the hogs
produced in our Missouri and North Carolina operations are transferred at
market value and processed at the Companys two processing plants. Any excess
hog production, as well as the production at our Texas operations, is sold to
outside processors. The pork processing segment consists of two plants,
located in Missouri and North Carolina, which produce fresh and further
processed pork products for sale to the wholesale, retail, food service, and
institutional markets in the United States and to export markets.

In our third quarter ending December 27, 2003, the USDA reported that the
U.S. pork industry produced a record 5.5 billion pounds compared to 5.3 billion
pounds in the same quarter the previous year. For the nine months ended the
same date, the industry produced 15.0 billion pounds compared to 14.9 billion
pounds for the same period the previous year. In spite of this increased
supply, average lean hog prices were 20% higher in the recent quarter and 24.5%
higher for the nine-month period than in the comparable periods the prior year.
Also, the USDA pork cutout (the composite wholesale meat price of a market hog
after processing) was 9.8% and 15.8% higher in the recent quarter and
nine-month period as compared to the same periods last year, respectively.
Strong demand for pork products was the primary driver in these increased
prices.

Generally, our overall revenues follow market prices for wholesale pork
and lean hog prices, while our costs are impacted by commodity grain prices,
primarily corn and soybean meal. On December 30, 2003, the USDA issued a Hog
and Pig report that indicated the likelihood of increased pork production in
2004. Despite this bearish report, continued strong demand has trended cash
prices higher during this interim period. Ongoing strength in hog prices is
contingent on increased demand for pork products or a reduced supply of hogs in
the future. In the December 31, 2003 cold storage report, the USDA reported
that freezer stocks of pork remain relatively unchanged from the previous year,
providing further evidence of strong demand for pork products in recent
periods. On January 12, 2004, the USDA issued its Crop Production Annual
Summary, downwardly revising the 2003/2004 crop carryout estimates for both
corn and soybeans. This reduced supply estimate has resulted in an increase of
the near-term prices of corn and

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soybean meal, the primary ingredients in our feed rations. Future prices
on these ingredients will depend on adjusting demand for these products until
the new crop harvest is available in the fall of 2004.

We have been experiencing health issues in our Texas operations due to
Porcine Reproductive and Respiratory Syndrome (PRRS), which is very common in
swine herds in the United States. PRRS has had a negative effect on
reproduction in our Texas operations, which has decreased production volume and
increased costs. We have had success in eliminating PRRS in some of our
facilities through depopulation of the facility and repopulation with PRRS
negative breeding stock. We are in the process of depopulating / repopulating
the Texas facilities, but have not had consistent success in eliminating PRRS.

On December 23, 2003, a case of BSE (bovine spongiform encephalopathy) was
confirmed in a dairy cow in the State of Washington. World markets reacted to
this event and a number of nations banned the import of beef products from the
U.S, pending further investigation and action by the U.S. beef industry. For
the most part, these bans continue today and have caused a moderation of beef
prices in the U.S. since the discovery. The U.S. Congress has reacted by
considering potential legislation that includes banning downer livestock from
the food chain, re-assessing country-of-origin labeling, mandatory animal
identification and traceability requirements, and potential changes in the
current practice of feeding animal by-products. It is uncertain what impact
these events may have on the pork industry.

Results of Operations

13 Weeks Ended December 27, 2003 Compared to the 13 Weeks Ended December 28, 2002

The following table presents selected financial information for our
production and processing segments for the 13 weeks ended December 27, 2003 and
December 28, 2002. Net sales, gross profit and operating (loss) income by
segment are also presented as a percentage of their respective totals. The two
columns under quarter-to-quarter change show the dollar and percentage change
from the quarter ended December 27, 2003 to the quarter ended December 28,
2002. Intersegment sales are based on market prices.

|                        |              |                               |   |                                  |       |                   |  |        |       |              |   |       |       |   |  |         |       |   |   |       |      |  |  |       |       |  
|----------------------- | ------------ | ----------------------------- | - | -------------------------------- | ----- | ----------------- |  | ------ | ----- | ------------ | - | ----- | ----- | - |  | ------- | ----- | - | - | ----- | ---- |  |  | ----- | ----- | -
|                        |              |                               |   | For the 13 Weeks Ended           |       | Qtr to Qtr Change
|                        |              |                               |   |                                  |       |                  
|                        |              |                               |   | December 27,                     |       |                   |  |        |       | December 28, |   |       |       |   |  | 2003 to |       |   |   |      
|                        |              |                               |   | 2003                             |       | %                 |  | 2002   |       | %            |   | 2002  |       | %
|                        |              |                               |   |                                  |       |                   |  |        |       |              |   |       |       |  
|                        |              |                               |   | (In millions except percentages)
|Net Sales               |              |                               |   |                                  |       |                   |  |        |       |              |   |       |       |   |  |         |       |   |   |       |      |  |  |      
|                        | Production   |                               | $ | 119.0                            |       |                   |  | 59.6   | %     |              | $ | 86.3  |       |   |  | 56.0    | %     |   | $ | 32.7  |      |  |  | 37.9  | %    
|                        | Processing   |                               |   | 177.9                            |       |                   |  | 89.0   | %     |              |   | 141.3 |       |   |  | 91.7    | %     |   |   | 36.6  |      |  |  | 25.9  | %    
|                        | Intersegment |                               |   | (97.1                            | )     |                   |  | (48.6  | )%    |              |   | (73.5 | )     |   |  | (47.7   | )%    |   |   | (23.6 | )    |  |  | (32.1 | )%   
|                        |              |                               |   |                                  |       |                   |  |        |       |              |   |       |       |   |  |         |       |   |   |       |      |  |  |       |      
|                        |              | Total Net Sales               |   | $                                | 199.8 |                   |  |        | 100.0 | %            |   | $     | 154.1 |   |  |         | 100.0 | % |   | $     | 45.7 |  |  |       | 29.7  | %
|                        |              |                               |   |                                  |       |                   |  |        |       |              |   |       |       |   |  |         |       |   |   |       |      |  |  |       |      
|Gross Profit            |              |                               |   |                                  |       |                   |  |        |       |              |   |       |       |   |  |         |       |   |   |       |      |  |  |      
|                        | Production   |                               | $ | (6.3                             | )     |                   |  | (70.0  | )%    |              | $ | (25.5 | )     |   |  | 274.2   | %     |   | $ | 19.2  |      |  |  | 75.3  | %    
|                        | Processing   |                               |   | 15.3                             |       |                   |  | 170.0  | %     |              |   | 16.2  |       |   |  | (174.2  | )%    |   |   | (0.9  | )    |  |  | (5.6  | )%   
|                        |              |                               |   |                                  |       |                   |  |        |       |              |   |       |       |   |  |         |       |   |   |       |      |  |  |       |      
|                        |              | Total Gross Profit            |   | $                                | 9.0   |                   |  |        | 100.0 | %            |   | $     | (9.3  | ) |  |         | 100.0 | % |   | $     | 18.3 |  |  |       | 196.8 | %
|                        |              |                               |   |                                  |       |                   |  |        |       |              |   |       |       |   |  |         |       |   |   |       |      |  |  |       |      
|Operating Income (Loss) |              |                               |   |                                  |       |                   |  |        |       |              |   |       |       |   |  |         |       |   |   |       |      |  |  |      
|                        | Production   |                               | $ | (6.3                             | )     |                   |  | (131.3 | )%    |              | $ | (25.7 | )     |   |  | 182.3   | %     |   | $ | 19.4  |      |  |  | 75.5  | %    
|                        | Processing   |                               |   | 14.4                             |       |                   |  | 300.0  | %     |              |   | 14.6  |       |   |  | (103.5  | )%    |   |   | (0.2  | )    |  |  | (1.4  | )%   
|                        | Corporate    |                               |   | (3.3                             | )     |                   |  | (68.8  | )%    |              |   | (3.0  | )     |   |  | 21.3    | %     |   |   | (0.3  | )    |  |  | (10.0 | )%   
|                        |              |                               |   |                                  |       |                   |  |        |       |              |   |       |       |   |  |         |       |   |   |       |      |  |  |       |      
|                        |              | Total Operating Income (Loss) |   | $                                | 4.8   |                   |  |        | 100.0 | %            |   | $     | (14.1 | ) |  |         | 100.0 | % |   | $     | 18.9 |  |  |       | 134.0 | %
|                        |              |                               |   |                                  |       |                   |  |        |       |              |   |       |       |   |  |         |       |   |   |       |      |  |  |       |      

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Consolidated

Net Sales.Net sales increased by $45.7 million, or 29.7%, to $199.8 million
in the third quarter of fiscal year 2004 from $154.1 million in the comparable
period last year. The increase was attributed to an increase in prices of
$32.9 million, which includes a $7.6 million increase in gains recorded for
lean hog futures contracts, combined with an increase in volume of $12.8
million. Overall, live hog and wholesale pork prices increased compared to the
prior period despite larger than expected supplies of pork industry wide. Pork
prices remain very attractive compared to other meat proteins which have caused
stronger demand. See Segment Analysis below for comments on changes in sales
by business segment.

Gross Profit.Gross profit increased by $18.3 million to $9.0 million in the
third quarter of fiscal year 2004 from a loss of $9.3 million in the comparable
period last year. As a percentage of net sales, gross profit increased to 4.5%
from (6.0)%. The current year gross profit increase is primarily the result of
higher live hog and wholesale pork prices as mentioned above, partially offset
by a 7.8% increase in costs to produce our products during the third quarter of
fiscal year 2004 compared to the same period last year.

Selling, General and Administrative Expenses.Selling, general and
administrative expenses decreased as a percentage of net sales to 2.2% in the
third quarter of fiscal year 2004 from 2.9% in the comparable period last year.
In dollar terms, selling, general and administrative expenses decreased by
$0.1 million, or 2.2%, to $4.4 million in the third quarter of fiscal year 2004
from $4.5 million in the comparable period last year.

Operating Income (Loss).Operating income increased by $18.9 million to $4.8
million in the third quarter of fiscal year 2004 from an operating loss of
$14.1 million in the comparable period last year. The increase is attributable
to the factors mentioned above.

Interest Expense, net.Interest expense, net, was constant at $6.0 million in
the third quarter of fiscal year 2004 and the comparable period last year.
Average total debt outstanding for both periods was comparable as well as
interest rates and bank margins . See Liquidity and Capital Resources below
for more information.

Income Tax Benefit / Expense.Our effective tax rate was 38.9% in the third
quarter of fiscal year 2004 and in the comparable period last year.

Segment Analysis

Hog Production. Net sales increased by $32.7 million, or 37.9%, to $119.0
million in the third quarter of fiscal year 2004 from $86.3 million in the
comparable period last year. The increase primarily resulted from a 19.6%
increase in market hog sales prices, combined with a 7.6% increase in volume
attributable to the additional contract production in North Carolina and
increased marketings in Missouri, offset slightly by a decrease in production
in Texas due to health issues. As mentioned above, gains recorded for lean hog
futures contracts had a $7.6 million positive impact on the change in net
sales. Intersegment sales to our pork processing segment transferred at market
prices are eliminated in the Condensed Consolidated Statements of Operations.

Gross profit increased by $19.2 million to a loss of $6.3 million in the
third quarter of fiscal year 2004 from a loss of $25.5 million in the
comparable period last year. The increase was the result of a higher volume of
hogs produced at higher market hog sales prices as mentioned above, partially
offset by a 3.9% increase in hog production costs on a per hundred weight
basis. The majority of the increase in hog production cost was due to higher
feed input costs and health issues in Texas compared to the same period last
year.

Operating income increased by $19.4 million to an operating loss of $6.3
million in the third quarter of fiscal year 2004 from an operating loss of
$25.7 million in the comparable period last year. The increase is attributed
to the factors mentioned above.

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Pork Processing. Net sales increased $36.6 million, or 25.9%, to $177.9
million in the third quarter of fiscal year 2004 from $141.3 million in the
comparable period last year. The increase resulted from a 13.0% increase in
pork product sales prices, combined with an 11.5% increase in volume processed
compared to the same period last year. The increase in volume was primarily
attributable to increased capacity utilization at the Clinton processing plant.

Gross profit decreased by $0.9 million to $15.3 million in the third
quarter of fiscal year 2004 from $16.2 million in the comparable period last
year. While overall sales prices increased 13.0%, our cost to purchase market
hogs increased by 20.5% and reduced our margins compared to the same period
last year. The increase in volume of 11.5% helped reduce the effect of the
lower product margins.

Operating income decreased by $0.2 million to $14.4 million in the third
quarter of fiscal year 2004 from $14.6 million in the comparable period last
year. The increase was attributed to the factors mentioned above.

39 Weeks Ended December 27, 2003 Compared to the 39 Weeks Ended December 28, 2002

The following table presents selected financial information for our
production and processing segments for the first three quarters ended December
27, 2003 and December 28, 2002. Net sales, gross profit and operating (loss)
income by segment are also presented as a percentage of their respective
totals. The two columns under year-to-year change show the dollar and
percentage change from the first three quarters ended December 27, 2003 to the
first three quarters ended December 28, 2002. Intersegment sales are based on
market prices.

|                        |              |                               |   |                                  |       |                     |  |       |       |              |   |        |       |   |  |         |       |   |   |       |       |  |  |       |       |  
|----------------------- | ------------ | ----------------------------- | - | -------------------------------- | ----- | ------------------- |  | ----- | ----- | ------------ | - | ------ | ----- | - |  | ------- | ----- | - | - | ----- | ----- |  |  | ----- | ----- | -
|                        |              |                               |   | For the 39 Weeks Ended           |       | Year to Year Change
|                        |              |                               |   |                                  |       |                    
|                        |              |                               |   | December 27,                     |       |                     |  |       |       | December 28, |   |        |       |   |  | 2003 to |       |   |   |      
|                        |              |                               |   | 2003                             |       | %                   |  | 2002  |       | %            |   | 2002   |       | %
|                        |              |                               |   |                                  |       |                     |  |       |       |              |   |        |       |  
|                        |              |                               |   | (In millions except percentages)
|Net Sales               |              |                               |   |                                  |       |                     |  |       |       |              |   |        |       |   |  |         |       |   |   |       |       |  |  |      
|                        | Production   |                               | $ | 342.0                            |       |                     |  | 62.3  | %     |              | $ | 261.6  |       |   |  | 58.3    | %     |   | $ | 80.4  |       |  |  | 30.7  | %    
|                        | Processing   |                               |   | 495.5                            |       |                     |  | 90.2  | %     |              |   | 409.4  |       |   |  | 91.2    | %     |   |   | 86.1  |       |  |  | 21.0  | %    
|                        | Intersegment |                               |   | (288.3                           | )     |                     |  | (52.5 | )%    |              |   | (222.1 | )     |   |  | (49.5   | )%    |   |   | (66.2 | )     |  |  | (29.8 | )%   
|                        |              |                               |   |                                  |       |                     |  |       |       |              |   |        |       |   |  |         |       |   |   |       |       |  |  |       |      
|                        |              | Total Net Sales               |   | $                                | 549.2 |                     |  |       | 100.0 | %            |   | $      | 448.9 |   |  |         | 100.0 | % |   | $     | 100.3 |  |  |       | 22.3  | %
|                        |              |                               |   |                                  |       |                     |  |       |       |              |   |        |       |   |  |         |       |   |   |       |       |  |  |       |      
|Gross Profit            |              |                               |   |                                  |       |                     |  |       |       |              |   |        |       |   |  |         |       |   |   |       |       |  |  |      
|                        | Production   |                               | $ | 0.1                              |       |                     |  | 0.3   | %     |              | $ | (43.2  | )     |   |  | 310.8   | %     |   | $ | 43.3  |       |  |  | 100.2 | %    
|                        | Processing   |                               |   | 29.1                             |       |                     |  | 99.7  | %     |              |   | 29.3   |       |   |  | (210.8  | )%    |   |   | (0.2  | )     |  |  | (0.7  | )%   
|                        |              |                               |   |                                  |       |                     |  |       |       |              |   |        |       |   |  |         |       |   |   |       |       |  |  |       |      
|                        |              | Total Gross Profit            |   | $                                | 29.2  |                     |  |       | 100.0 | %            |   | $      | (13.9 | ) |  |         | 100.0 | % |   | $     | 43.1  |  |  |       | 310.1 | %
|                        |              |                               |   |                                  |       |                     |  |       |       |              |   |        |       |   |  |         |       |   |   |       |       |  |  |       |      
|Operating Income (Loss) |              |                               |   |                                  |       |                     |  |       |       |              |   |        |       |   |  |         |       |   |   |       |       |  |  |      
|                        | Production   |                               | $ | 0.1                              |       |                     |  | 0.6   | %     |              | $ | (43.2  | )     |   |  | 160.6   | %     |   | $ | 43.3  |       |  |  | 100.2 | %    
|                        | Processing   |                               |   | 26.5                             |       |                     |  | 155.9 | %     |              |   | 25.4   |       |   |  | (94.4   | )%    |   |   | 1.1   |       |  |  | 4.3   | %    
|                        | Corporate    |                               |   | (9.6                             | )     |                     |  | (56.5 | )%    |              |   | (9.1   | )     |   |  | 33.8    | %     |   |   | (0.5  | )     |  |  | (5.5  | )%   
|                        |              |                               |   |                                  |       |                     |  |       |       |              |   |        |       |   |  |         |       |   |   |       |       |  |  |       |      
|                        |              | Total Operating Income (Loss) |   | $                                | 17.0  |                     |  |       | 100.0 | %            |   | $      | (26.9 | ) |  |         | 100.0 | % |   | $     | 43.9  |  |  |       | 163.2 | %
|                        |              |                               |   |                                  |       |                     |  |       |       |              |   |        |       |   |  |         |       |   |   |       |       |  |  |       |      

Consolidated

Net Sales.Net sales increased by $100.3 million, or 22.3%, to $549.2 million
in the first three quarters of fiscal year 2004 from $448.9 million in the
comparable period last year. The increase was attributed to an increase in
prices of $79.5 million, which includes a $5.3 million increase in gains
recorded for lean hog futures contracts, combined with an increase in volume of
$20.8 million. Overall, live hog and wholesale pork prices increased compared
to the prior period due primarily to an overall decrease in supplies of all
meat proteins and significantly higher beef prices during the third quarter.
See Segment Analysis below for comments on changes in sales by business
segment.

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Gross Profit.Gross profit increased by $43.1 million to $29.2 million in the
first three quarters of fiscal year 2004 from a loss of $13.9 million in the
comparable period last year. As a percentage of net sales, gross profit
increased to 5.3% from (3.1)%. The current year gross profit increase is
primarily the result of higher live hog and wholesale pork prices as mentioned
above, partially offset by a 7.4% increase in costs to produce our products
during the first three quarters of fiscal year 2004 compared to the same period
last year.

Selling, General and Administrative Expenses.Selling, general and
administrative expenses were lower as a percentage of net sales at 2.3% in the
first three quarters of fiscal year 2004 compared to 3.0% in the comparable
period last year. In dollar terms, selling, general and administrative
expenses decreased by $0.8 million, or 6.3%, to $12.7 million in the first
three quarters of fiscal year 2004 from $13.5 million in the comparable period
last year.

Operating Income (Loss).Operating income increased by $43.9 million to $17.0
million in the first three quarters of fiscal year 2004 from an operating loss
of $26.9 million in the comparable period last year. The increase is
attributable to the factors mentioned above.

Interest Expense, net.Interest expense, net, increased by $1.5 million, or
8.5%, to $18.8 million in the first three quarters of fiscal year 2004 from
$17.3 million in the comparable period last year. The majority of the increase
was caused by an increase in total interest-bearing debt outstanding. See
Liquidity and Capital Resources below for more information.

Income Tax Benefit / Expense.Our effective tax rate was 38.9% in the first
three quarters of fiscal year 2004 and in the comparable period last year.

Segment Analysis

Hog Production. Net sales increased by $80.4 million, or 30.7%, to $342.0
million in the first three quarters of fiscal year 2004 from $261.6 million in
the comparable period last year. The increase primarily resulted from a 22.7%
increase in market hog sales prices, combined with a 4.7% increase in volume
attributable primarily to the effects of increased contract production in North
Carolina. As mentioned above, gains recorded for lean hog futures contracts
had a $5.3 million positive impact on the change in net sales. Intersegment
sales to our pork processing segment transferred at market prices are
eliminated in the Condensed Consolidated Statements of Operations.

Gross profit increased by $43.3 million to $0.1 million in the first three
quarters of fiscal year 2004 from a loss of $43.2 million in the comparable
period last year. The increase was primarily the result of a higher volume of
hogs produced and higher market hog sales price mentioned above. Hog
production costs per hundredweight were 6.9% higher during the first three
quarters of fiscal year 2004 compared to the same period last year. The
majority of the increase in hog production costs was due to higher feed input
costs compared to the same period last year and, to a lesser extent, production
deficiencies in Texas due to the impact of health issues.

Operating income increased by $43.3 million to $0.1 million in the first
three quarters of fiscal year 2004 from an operating loss of $43.2 million in
the comparable period last year. The increase is attributed to the factors
mentioned above.

Pork Processing. Net sales increased $86.1 million, or 21.0%, to $495.5
million in the first three quarters of fiscal year 2004 from $409.4 million in
the comparable period last year. The increase resulted from a 13.5% increase
in pork product sales prices, combined with a 6.6% increase in volume processed
compared to the same period last year. The increase in volume was primarily
attributable to increased capacity utilization at the Clinton processing plant.

Gross profit decreased by $0.2 million to $29.1 million in the first three
quarters of fiscal year 2004 from $29.3 million in the comparable period last
year. The decrease primarily resulted from lower

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margins on pork products resulting from 21.4% higher market hog costs,
offset with higher volume through the plants. Freight costs increased by $2.3
million, or 9.1%, as a result of higher volume shipped and higher charges
incurred to transport the product. Processing costs on a per unit basis were
comparable during the first three quarters of fiscal year 2004 compared to the
same period last year.

Operating income increased by $1.1 million to $26.5 million in the first
three quarters of fiscal year 2004 from $25.4 million in the comparable period
last year. The increase was attributed to the factors mentioned above.

Liquidity and Capital Resources

Our primary source of financing has been cash flow from operations and
bank borrowings. Our ongoing operations will require the availability of funds
to service debt, fund working capital and make capital expenditures on our
facilities. We expect to finance these activities through cash flow from
operations and from amounts available under our revolving credit facility.

Net cash flow provided by (used in) operating activities was $46.3 million
and $(20.4) million for the first three quarters ended in fiscal years 2004 and
2003, respectively. The improvement in the first three quarters of fiscal year
2004 compared to the same period last year was primarily due to a decrease in
net loss and slower expansion in hog inventories.

Net cash flow used in investing activities was $19.9 million and $16.4
million for the first three quarters ended in fiscal years 2004 and 2003,
respectively. Net cash used in investing activities consisted of $33.5 million
and $24.4 million for capital expenditures relating to property, plant and
equipment and breeding stock during the first three quarters ended in fiscal
years 2004 and 2003, respectively. The Company received proceeds from disposal
of property, plant, equipment and breeding stock of $13.6 million and $8.0
million during the first three quarters ended in fiscal years 2004 and 2003,
respectively, primarily representing culled breeding stock. The increase in
proceeds is directly related to the increase in market hog sales prices which
help determine the cull sow market.

Net cash flow (used in) provided by financing activities was $(26.4)
million and $29.6 million for the first three quarters ended in fiscal years
2004 and 2003, respectively. As of December 27, 2003, our total debt was
$278.5 million.

Borrowings for working capital needs are provided under a Credit Agreement
that provides for up to $150 million of revolving credit (with actual credit
limit determined monthly by reference to a borrowing base formula), including
up to $15 million of letters of credit, and a term loan facility with $50.0
million outstanding at December 27, 2003. Obligations under the Credit
Agreement are secured by liens on substantially all of our assets. In addition
to customary financial covenants, the Credit Agreement contains customary
restrictions on, among other things, encumbrance or disposal of assets,
acquisitions, additional indebtedness, capital investment, payment of
subordinated debt and construction of new hog production facilities. In
addition to customary fees payable under credit facilities of this type,
amounts borrowed under the Credit Agreement bear interest at fluctuating rates
selected by us. These rates are based on the agent banks base rate (the
greater of the agent banks prime rate or the federal funds rate plus one half
of one percent) or LIBOR plus, in each case, an applicable margin, currently
ranging from 1.5% to 3.125%, determined by our leverage ratio. All borrowings
under the revolving credit facility mature on August 21, 2004, and all
borrowings under the term debt mature on August 21, 2005.

Total indebtedness at December 27, 2003 was $278.5 million, as compared to
$300.0 million at December 28, 2002. At December 27, 2003, we had $50.0
million outstanding under our revolving credit facility, $10.5 million in
letters of credit and $89.5 million available for borrowing under our revolving
credit facility. The revolving credit facility of $50.0 million has been
classified as current in the condensed consolidated balance sheets as of
December 27, 2003, because the revolving credit facility matures in August
2004. We are in discussions with our banks and expect to have commitments for
a new long-term facility before the end of our fiscal year 2004.

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In fiscal 2004, we expect to spend approximately $31 million on net capital
expenditures, of which we expect to spend:



| |  |  | Approximately $10 million in upgrades and improvements in our
processing operations;   
| | - |  | ---------------------------------------------------------------------------------------
|
| |  |  | Approximately $6 million in upgrades and improvements in our
production operations; and
|
| |  |  | Approximately $15 million in net breedstock purchases.                                 

We believe that available borrowings under our credit facility, available
cash and internally generated funds will be sufficient to support our working
capital, capital expenditures and debt service requirements for the foreseeable
future. Our ability to generate cash, however, is subject to a certain extent
to general economic, financial, competitive, legislative, regulatory and other
factors beyond our control. We cannot assure you that our business will
generate sufficient cash flow from operations or that future borrowings will be
available under our revolving credit facility in an amount sufficient to enable
us to pay our indebtedness, including the $175 million 91⁄4% senior unsecured
notes due 2011 (91⁄4% Notes), or to fund our other liquidity needs. If we
consummate any material acquisitions or expand our operations, we may need to
seek additional sources of funding, which might potentially come from the
issuance of additional equity, debt or the pursuit of joint ventures to the
extent that such options are available.

The following table represents a summary of our contractual cash
obligations as of December 27, 2003:

|                                       |  |                        |         |         |  |           |        |           |  |            |        |  |  |   |       |  |  |   |         | 
|-------------------------------------- |  | ---------------------- | ------- | ------- |  | --------- | ------ | --------- |  | ---------- | ------ |  |  | - | ----- |  |  | - | ------- | 
|                                       |  | Payments due by period
|                                       |  |                       
|                                       |  | Total                  |         | Current |  | 1-3 years |        | 4-5 years |  | Thereafter
|Contractual Cash Obligations           |  |                        |         |         |  |           |        |           |  |           
|                                       |  | (in thousands)        
|Long Term Debt                         |  | $                      | 275,000 |         |  | $         | 75,000 |           |  | $          | 25,000 |  |  | $ |      |  |  | $ | 175,000 | 
|Capital Lease Obligations              |  |                        | 3,537   |         |  |           | 818    |           |  |            | 2,048  |  |  |   | 652   |  |  |   | 19      | 
|Operating Leases                       |  |                        | 26,059  |         |  |           | 5,875  |           |  |            | 9,844  |  |  |   | 5,519 |  |  |   | 4,821   | 
|Unconditional Purchase Obligations (1) |  |                        | 8,869   |         |  |           | 8,869  |           |  |            |       |  |  |   |      |  |  |   |        | 
|                                       |  |                        |         |         |  |           |        |           |  |            |        |  |  |   |       |  |  |   |         | 
|Total Contractual Cash Obligations     |  | $                      | 313,465 |         |  | $         | 90,562 |           |  | $          | 36,892 |  |  | $ | 6,171 |  |  | $ | 179,840 | 
|                                       |  |                        |         |         |  |           |        |           |  |            |        |  |  |   |       |  |  |   |         | 

(1) Includes only forward grain purchase contracts

Amounts not included in above table

Most of our hog production is raised in company-owned facilities. Some of
the production, however, is raised under farrowing, nursery, or finishing
contracts with individual farmers. In these relationships, we typically own
the livestock and provide the necessary feed, genetics, and veterinary
supplies, while the contract producer provides the land, facilities, labor,
utilities, and other costs of production. These contracts vary from terms of
less than one year to up to twelve years. Payments under these agreements are
included in cost of goods sold. These payments represented approximately 11
percent of our hog production segments cost of goods sold for the first three
quarters ended December 27, 2003. All of these contracts are cancelable by us
if the producer fails to perform to an acceptable level.

At our North Carolina pork processing facility, we have contracts with
producers to provide us with market hogs for the amount we dont produce at our
hog production facilities in order to meet our processing needs. These
contracts vary in length but are all based on a market price and grade and
yield formula. Over the next 5 years we are contracted to purchase
approximately 1,350,000 market hogs under these contracts.

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Critical Accounting Policies

In preparing the consolidated financial statements in accordance with
generally accepted accounting principles, we are required to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues,
expenses, and related disclosures at the date of the consolidated financial
statements and during the reporting period. Actual results may differ from
those estimates due to the complexity and subjectivity of those estimates.
Management has identified the accounting policies it believes to be the most
important as inventory valuation of livestock, estimates of liabilities, and
accounting for derivative instruments.

Inventory valuation of livestock is calculated based on a standard cost
model for each geographic hog production region. This model is based on the
current years budgeted costs and inventory projections at each age and phase
of the production cycle, adjusted to actual costs and reduced to the lower of
actual cost or market when required. Management believes this method for
valuing livestock most accurately represents actual inventory costs.

Estimated liabilities, such as self-insured workers compensation and
health insurance, bonuses, and legal obligations are determined based on
information received from third parties and management estimates. These
obligations are provided for when the loss is probable and the amount is
reasonably estimable. Actual settlement costs may vary from estimates we made.
Management believes the estimates are reasonable based on current information.

Derivative instruments are accounted for in accordance with Financial
Standards Board Statement No. 133 (SFAS 133), Accounting for Derivative
Instruments and Hedging Activities. Because of the complexity involved in
qualifying for hedge treatment for our commodity contracts, we mark these
exchange-traded contracts to market with the resulting gain or loss recorded in
sales for lean hog contracts or cost of sales for all other commodity
contracts. This may result in large fluctuations in our earnings depending on
the volume of commodity contracts and their corresponding volatility.

Market Risk

Our operating results are influenced by fluctuations in the price of our
primary feed components, corn and soybean meal, and by fluctuations in market
hog and wholesale pork sales prices. The cost and supply of feed components and
market hog and wholesale pork sales prices are determined by constantly
changing market forces of supply and demand, which are driven by matters over
which we have no control, including weather, current and projected worldwide
grain stocks and prices, grain export prices and supports, hog production and
governmental agricultural policies. In our hog production segment we use
forward contracts, as well as futures and options contracts, to establish
adequate supplies of future grain requirements, to secure margins and to reduce
the risk of market fluctuations. To secure margins and minimize earnings
volatility in our pork processing segment, we utilize lean hog futures to hedge
future pork product sales. While this may tend to limit our ability to
participate in gains from favorable commodity price fluctuation, it also tends
to minimize earnings volatility and secure future margins. For the first three
quarters ended December 27, 2003, we recognized income under SFAS 133 of $5.8
million in net sales for gains related to lean hog futures and gains of $3.0
million in costs of goods sold relating to the hedging of feed components. For
open futures contracts, we use a sensitivity analysis technique to evaluate the
effect that changes in the market value of commodities will have on these
commodity derivative instruments. As of December 27, 2003, the potential change
in fair value of exchange-traded contracts, assuming a 10% change in the
underlying commodity price, was $3.1 million.

We are exposed to changes in interest rates. Our term and revolving credit
facilities have variable interest rates. Interest rate changes therefore
generally do not affect the market value of such debt but do impact the amount
of our interest payments and, therefore, our future earnings and cash flows.
Assuming other factors are held constant, a 1% change in interest rates would
have an approximately $1.0 million impact on interest expense. Conversely, for
fixed rate debt, interest rate changes do not impact future cash flows and
earnings, but do impact the fair market value of such debt, assuming other
factors are held constant. During the fiscal year ended March 30, 2002, we
entered into an interest rate swap agreement to

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convert the variable base interest rate of our bank term debt to a fixed
rate of 3.0125% plus the agent banks applicable margin (currently 3.125% at
December 27, 2003). The swap is accounted for as a cash flow hedge under SFAS
133. During the first three quarters ended December 27, 2003, we recognized a
$0.2 million gain, net of tax, into Accumulated Other Comprehensive Loss for
the market value of the swap.

The
91⁄4% Notes had a fair value of approximately $177.6 million as of
December 27, 2003 based on inter-dealer prices, as compared to the book value
of $175.0 million as of December 27, 2003.




Item 3. Qualitative and Quantitative Disclosures About Market Risk

Please see Managements Discussion and Analysis of Financial Condition
and Results of Operations  Market Risk above.




Item 4. Controls and Procedures

As of the end of the period covered by this report, we have evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures under the supervision and with the participation of the Chief
Executive Officer (CEO) and Chief Financial Officer (CFO). Based on this
evaluation, our management, including the CEO and CFO, concluded that our
disclosure controls and procedures were effective. There have been no
significant changes in our internal controls or in other factors that could
significantly affect internal controls subsequent to the date of their
evaluation.




PART II  OTHER INFORMATION




Item 1. Legal Proceedings

We have in prior years settled two citizens action suits which sought to
enforce alleged violations of the Clean Air Act, Clean Water Act and CERCLA
against us and ContiGroup Companies, Inc. (ContiGroup). The U.S.
Environmental Protection Agency (the E.P.A.) had intervened in this action
and filed a separate notice of violation against us under the Clean Air Act.
This settlement, in the form of a consent decree (EPA Consent Decree),
resolved all outstanding issues of ContiGroup and us with the citizens group
and the E.P.A. In 1998, we engaged in a series of transactions with ContiGroup
pursuant to which we purchased from ContiGroup its North Missouri Farms hog
production operations and ContiGroup purchased a 51.0% ownership interest in us
(the 1998 ContiGroup transaction). To the extent that ContiGroup incurred
any liability in this litigation, we assumed that liability pursuant to the
terms of our 1998 ContiGroup transaction. The EPA Consent Decree, built upon
the 1999 consent decree with the State of Missouri referenced below, requires
us and ContiGroup to meet certain performance standards, such as a 50 percent
reduction in nitrogen concentration of the effluent applied to area fields over
a prescribed time period. Other key elements of the EPA Consent Decree
include: monitoring air emissions from lagoons and barns; compliance with
certain best management practices to reduce the risk of spills; testing of
selective lagoons to ensure integrity, and the payment of a $350,000 civil
penalty. The counsel for the citizen plaintiffs has submitted a petition for
recovery of attorneys fees in connection with the lawsuits against both us and
ContiGroup. On September 10, 2003, the Court issued an order denying the
majority of fees sought by counsel for the citizen plaintiffs, and we have
settled with the plaintiffs and their counsel on the balance of the fees, which
was previously accrued for in our financial statements.

In 1999, we settled a suit filed by the Attorney General of the State of
Missouri against us and ContiGroup. As referenced above, we assumed
ContiGroups liability in this action in connection with the 1998 ContiGroup
transaction. The settlement required us and ContiGroup to enter into a consent
judgment (Missouri Consent Decree) pursuant to which we were obligated to
invest $25 million on or before May 19, 2004, for researching, installing and
operating improved technology to control wastewater, air and odor emissions
from our Missouri farms. All such investments were subject to the approval of
a panel of independent university experts (Expert Panel). In June 2002, the
State of Missouri filed a lawsuit against

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us seeking penalties and injunctive relief for additional alleged violations of
air and water regulations. We have reached an agreement in principle on a
settlement with the State, subject to final court approval, requiring us to pay
an additional fine of $333,000. The settlement also extends the implementation
schedule under the Missouri Consent Decree from 2004 until 2010. In addition,
and in lieu of the $25 million investment commitment and deadline referenced
above, we have committed to install improved wastewater, air and odor
technology at all of our finisher farms in northern Missouri, subject to the
approval of the Expert Panel.

Two nuisance suits were filed against ContiGroup and us during the second
quarter of fiscal year 2003 in the Circuit Court of Jackson County, Kansas
City, Missouri. There are multiple plaintiffs in each suit, who claim to live
near swine farms owned by ContiGroup but under production contracts with us.
Plaintiffs allege that odors from these farms interfered with the plaintiffs
right to use and have quiet enjoyment of their respective properties. We are
obligated by contract to indemnify ContiGroup for any liabilities arising from
this litigation. We have filed an answer, believe we have good defenses to
these actions, and intend to vigorously defend these suits.

In addition, we are involved from time to time in routine litigation
incidental to our business. Although no assurance can be given as to the
outcome or expense associated with any of these routine proceedings, we believe
that none of such proceedings currently pending should, individually or in the
aggregate, have a material adverse effect on our financial statements.




|        |  |                      
|------- |  | ---------------------
|Item 2. |  | Changes in Securities
|        |  |                      
|        |  | Not applicable       




|        |  |                                
|------- |  | -------------------------------
|Item 3. |  | Defaults Upon Senior Securities
|        |  |                                
|        |  | Not applicable                 




|        |  |                                                    
|------- |  | ---------------------------------------------------
|Item 4. |  | Submission of Matters to a Vote of Security Holders
|        |  |                                                    
|        |  | Not applicable                                     




|        |  |                  
|------- |  | -----------------
|Item 5. |  | Other Information
|        |  |                  
|        |  | Not applicable   




|        |  |                                 
|------- |  | --------------------------------
|Item 6. |  | Exhibits and Reports on Form 8-K

| |  |     |  |              |  |                                                                                                                                                                           
| |  | --- |  | ------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (a) |  | Exhibits     |  |                                                                                                                                                                           
| |  |     |  |              |  |                                                                                                                                                                           
| |  |     |  | Exhibit 31.1 |  | Certification of John M. Meyer, Chief Executive Office, pursuant to Rule 13a-15(e)/15d-15(e).                                                                             
| |  |     |  |              |  |                                                                                                                                                                           
| |  |     |  | Exhibit 31.2 |  | Certification of Stephen A. Lightstone, Chief Financial Officer, pursuant to Rule 13a-15(e)/15d-15(e).                                                                    
| |  |     |  |              |  |                                                                                                                                                                           
| |  |     |  | Exhibit 32.1 |  | Certification of John M. Meyer, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.        
| |  |     |  |              |  |                                                                                                                                                                           
| |  |     |  | Exhibit 32.2 |  | Certification of Stephen A. Lightstone, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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| |  |     |  |                      |  | 
| |  | --- |  | -------------------- |  | 
| |  | (b) |  | Reports on Form 8-K.

| |    |                                                                                                                                                                                                                                                                                                                                                                     
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | A Current Report on Form 8-K was filed with the
SEC on November 12, 2003, to report, under Item 5, our second
quarter earnings. The earnings release, including our
Unaudited Condensed Consolidated Statements of Operations for
the 13 and 26 weeks ended September 27, 2003, and September
28, 2002, was filed as Exhibit 99.1 to the Current Report on
Form 8-K.

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SIGNATURES

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

|                  |  |  |                           |                                          
|----------------- |  |  | ------------------------- | -----------------------------------------
|                  |  |  |                           | PSF GROUP HOLDINGS, INC.                 
|                  |  |  |                           |                                          
|February 10, 2004 |  |  | /s/ Stephen A. Lightstone
|                  |  |  |                           |                                          
|Date              |  |  |                           | Stephen A. Lightstone                    
|                  |  |  |                           | Executive Vice President, Chief Financial
|                  |  |  |                           | Officer and Treasurer                    
|                  |  |  |                           | (Principal Financial and                 
|                  |  |  |                           | Accounting Officer)                      

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