##### 



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 November 30, 2002

OR

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

For the transaction period from __________________________ to __________________________

Commission File Number: 0-7277

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

North Carolina
(State or other jurisdiction of incorporation or organization)

56-0945643
(I.R.S. Employer Identification No.)

9990 Princeton Road
Cincinnati, Ohio 45246
(Address of principal executive offices) (zip code)

Registrants telephone number, including area code: (513) 874-8741



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(Former name or former address, if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]     No [  ]

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date.

|                     |  |                                
|-------------------- |  | -------------------------------
|Class                |  | Outstanding at January 13, 2003
|                     |  |                                
|Class A Common Stock |  | 100,000                        





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PIERRE FOODS, INC.

INDEX

|                                                                                              |                   |                                                                                                                                                      |         |          |         | 
|--------------------------------------------------------------------------------------------- | ----------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | -------- | ------- | 
|                                                                                              |                   |                                                                                                                                                      |         | Page No.
|                                                                                              |                   |                                                                                                                                                      |         |         
|Part I. Financial Information:                                                                |                   |                                                                                                                                                      |         |         
|Item 1. Financial Statements                                                                  |                   |                                                                                                                                                      |         |         
|                                                                                              |                   | Consolidated Balance Sheets -
November 30, 2002 and March 2, 2002                                                                                    |         |          | 3 - 4   | 
|                                                                                              |                   | Consolidated Statements of
Operations and Retained Earnings -
Thirteen Weeks Ended November 30, 2002
and Thirteen Weeks Ended December 1, 2001       |         |          | 5  6   | 
|                                                                                              |                   | Consolidated Statements of
Operations and Retained Earnings -
Thirty-nine Weeks Ended November 30, 2002
and Thirty-nine Weeks Ended December 1, 2001 |         |          | 7  8   | 
|                                                                                              |                   | Consolidated Statements of Cash Flows -
Thirty-nine Weeks Ended November 30, 2002 and
Thirty-nine Weeks Ended December 1, 2001                       |         |          | 9 - 10  | 
|                                                                                              |                   | Notes to Consolidated Financial
Statements                                                                                                           |         |          | 11 - 14 | 
|Item 2. Managements Discussion and Analysis
of Financial Condition and Results of Operations |                   |                                                                                                                                                      | 15 - 18 |         
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |                   |                                                                                                                                                      | 19      |         
|Item 4. Controls and Procedures                                                               |                   |                                                                                                                                                      | 19      |         
|Part II. Other Information:                                                                   |                   |                                                                                                                                                      |         |         
|Item 5 Other Information                                                                      |                   |                                                                                                                                                      | 20      |         
|Item 6. Exhibits and Reports on Form 8-K                                                      |                   |                                                                                                                                                      | 20      |         
|                                                                                              | Signatures        |                                                                                                                                                      |         | 21       |        
|                                                                                              | Certifications    |                                                                                                                                                      |         | 22 - 23  |        
|                                                                                              | Index to Exhibits |                                                                                                                                                      |         | 24 - 25  |        

2



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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PIERRE FOODS, INC. AND SUBSIDIARIES______________________________________

Consolidated Balance Sheets

|                                   |                                                                                                       |                      |            |                   |             |               |            |            |             | 
|---------------------------------- | ----------------------------------------------------------------------------------------------------- | -------------------- | ---------- | ----------------- | ----------- | ------------- | ---------- | ---------- | ----------- | 
|                                   |                                                                                                       |                      |            | (Unaudited)       |             |               |            |           
|                                   |                                                                                                       |                      |            | November 30, 2002 |             | March 2, 2002
|                                   |                                                                                                       |                      |            |                   |             |              
|ASSETS                             |                                                                                                       |                      |            |                   |             |               |            |           
|CURRENT ASSETS:                    |                                                                                                       |                      |            |                   |             |               |            |           
|                                   | Cash and cash equivalents                                                                             |                      | $          | 413,588           |             |               | $          | 4,577,982  |            
|                                   | Certificates of deposit of special purpose entity                                                     |                      |            | 1,240,000         |             |               |            | 1,240,000  |            
|                                   | Accounts receivable, net (includes related party receivables of
$2,365,000 in fiscal 2003)            |                      |            | 25,080,735        |             |               |            | 21,469,035 |            
|                                   | Inventories                                                                                           |                      |            | 27,515,429        |             |               |            | 23,852,855 |            
|                                   | Refundable income taxes                                                                               |                      |            |                  |             |               |            | 70,622     |            
|                                   | Deferred income taxes                                                                                 |                      |            | 2,349,617         |             |               |            | 2,349,617  |            
|                                   | Prepaid expenses and other current assets (includes related party
prepaid of $750,000 in fiscal 2003) |                      |            | 2,866,379         |             |               |            | 1,624,161  |            
|                                   |                                                                                                       |                      |            |                   |             |               |            |           
|                                   |                                                                                                       | Total current assets |            |                   | 59,465,748  |               |            |            | 55,184,272  | 
|                                   |                                                                                                       |                      |            |                   |             |               |            |           
|PROPERTY, PLANT AND EQUIPMENT, NET |                                                                                                       |                      | 52,881,909 |                   |             |               | 43,281,303 |           
|                                   |                                                                                                       |                      |            |                   |             |               |            |           
|OTHER ASSETS:                      |                                                                                                       |                      |            |                   |             |               |            |           
|                                   | Trade name, net                                                                                       |                      |            | 38,808,636        |             |               |            | 38,808,636 |            
|                                   | Goodwill, net                                                                                         |                      |            | 29,019,571        |             |               |            | 29,019,571 |            
|                                   | Note receivable  related party                                                                       |                      |            | 993,247           |             |               |            | 993,247    |            
|                                   | Deferred loan origination fees, net                                                                   |                      |            | 3,133,530         |             |               |            | 2,092,904  |            
|                                   | Other                                                                                                 |                      |            | 387,281           |             |               |            | 440,931    |            
|                                   |                                                                                                       |                      |            |                   |             |               |            |           
|                                   |                                                                                                       | Total other assets   |            |                   | 72,342,265  |               |            |            | 71,355,289  | 
|                                   |                                                                                                       |                      |            |                   |             |               |            |           
|                                   |                                                                                                       | Total Assets         |            | $                 | 184,689,922 |               |            | $          | 169,820,864 | 
|                                   |                                                                                                       |                      |            |                   |             |               |            |           

See accompanying notes to unaudited consolidated financial statements.

3



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PIERRE FOODS, INC. AND SUBSIDIARIES______________________________________

|                                          |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |            |             | 
|----------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----------- | ----------------- | ----------- | ------------- | ----------- | ---------- | ----------- | 
|                                          |                                                                                                                                                                                                                |                                            |             | (Unaudited)       |             |               |             |           
|                                          |                                                                                                                                                                                                                |                                            |             | November 30, 2002 |             | March 2, 2002
|                                          |                                                                                                                                                                                                                |                                            |             |                   |             |              
|LIABILITIES AND SHAREHOLDERS EQUITY      |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           
|CURRENT LIABILITIES:                      |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           
|                                          | Current installments of long-term debt                                                                                                                                                                         |                                            | $           | 356,743           |             |               | $           | 325,071    |            
|                                          | Trade accounts payable                                                                                                                                                                                         |                                            |             | 6,180,358         |             |               |             | 4,972,870  |            
|                                          | Accrued interest                                                                                                                                                                                               |                                            |             | 6,147,473         |             |               |             | 3,090,624  |            
|                                          | Accrued payroll and payroll taxes                                                                                                                                                                              |                                            |             | 6,031,301         |             |               |             | 6,077,062  |            
|                                          | Accrued promotions                                                                                                                                                                                             |                                            |             | 2,439,527         |             |               |             | 1,473,954  |            
|                                          | Income taxes payable                                                                                                                                                                                           |                                            |             | 1,024,746         |             |               |             |           |            
|                                          | Accrued taxes (other than income and payroll)                                                                                                                                                                  |                                            |             | 441,058           |             |               |             | 566,677    |            
|                                          | Other accrued liabilities (includes related party liabilities of
$2,147,574 in fiscal 2003)                                                                                                                    |                                            |             | 3,693,983         |             |               |             | 1,617,083  |            
|                                          |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           
|                                          |                                                                                                                                                                                                                | Total current liabilities                  |             |                   | 26,315,189  |               |             |            | 18,123,341  | 
|                                          |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           
|LONG-TERM DEBT, less current installments |                                                                                                                                                                                                                |                                            | 121,575,001 |                   |             |               | 115,047,605 |           
|                                          |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           
|OBLIGATION OF SPECIAL PURPOSE ENTITY      |                                                                                                                                                                                                                |                                            | 5,665,814   |                   |             |               | 5,858,139   |           
|                                          |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           
|OTHER LONG-TERM LIABILITIES               |                                                                                                                                                                                                                |                                            | 780,997     |                   |             |               | 1,032,696   |           
|                                          |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           
|DEFERRED INCOME TAXES                     |                                                                                                                                                                                                                |                                            | 2,552,066   |                   |             |               | 2,552,066   |           
|                                          |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           
|SHAREHOLDERS EQUITY:                     |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           
|                                          | Preferred stock  par value $.10, authorized 2,500,000 shares;
no shares issued                                                                                                                                |                                            |             |                  |             |               |             |           |            
|                                          | Common stock  no par value, 100,000 shares authorized, issued
and outstanding at November 30, 2002 and no par value,
authorized 100,000,000 shares; issued and outstanding at March
2, 2002 5,781,480 shares |                                            |             | 5,781,480         |             |               |             | 5,781,480  |            
|                                          | Additional paid in capital                                                                                                                                                                                     |                                            |             | 23,656,692        |             |               |             | 23,656,692 |            
|                                          | Retained earnings                                                                                                                                                                                              |                                            |             | 3,362,683         |             |               |             | 2,768,845  |            
|                                          | Note receivable  related party                                                                                                                                                                                |                                            |             | (5,000,000        | )           |               |             | (5,000,000 | )          
|                                          |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           
|                                          |                                                                                                                                                                                                                | Total shareholders equity                 |             |                   | 27,800,855  |               |             |            | 27,207,017  | 
|                                          |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           
|                                          |                                                                                                                                                                                                                | Total Liabilities and Shareholders Equity |             | $                 | 184,689,922 |               |             | $          | 169,820,864 | 
|                                          |                                                                                                                                                                                                                |                                            |             |                   |             |               |             |           

See accompanying notes to unaudited consolidated financial statements.

4



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PIERRE FOODS, INC. AND SUBSIDIARIES______________________________________

Consolidated Statements of Operations and Retained Earnings

(Unaudited)

|                                 |                                                                                                                                                                  |                          |                    |            |                      |            |                  |            |            |            |  
|-------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | ------------------ | ---------- | -------------------- | ---------- | ---------------- | ---------- | ---------- | ---------- | -
|                                 |                                                                                                                                                                  |                          |                    |            | Thirteen Weeks Ended
|                                 |                                                                                                                                                                  |                          |                    |            |                     
|                                 |                                                                                                                                                                  |                          |                    |            | November 30, 2002    |            | December 1, 2001
|                                 |                                                                                                                                                                  |                          |                    |            |                      |            |                 
|REVENUES                         |                                                                                                                                                                  | $                        | 78,758,011         |            |                      | $          | 68,021,456       |           
|                                 |                                                                                                                                                                  |                          |                    |            |                      |            |                  |           
|COSTS AND EXPENSES:              |                                                                                                                                                                  |                          |                    |            |                      |            |                  |           
|                                 | Cost of goods sold (includes related party transactions totaling
$1,203,822 and $53,296 in fiscal 2003 and fiscal 2002, respectively)                            |                          |                    | 52,655,502 |                      |            |                  | 45,335,788 |           
|                                 | Selling, general and administrative expenses (includes related party
transactions totaling $5,126,569 and $720,577 in fiscal 2003 and fiscal
2002, respectively) |                          |                    | 18,148,871 |                      |            |                  | 16,084,493 |           
|                                 | (Gain) loss on disposition of property, plant and equipment, net                                                                                                 |                          |                    | (5,492     | )                    |            |                  | 35,150     |           
|                                 | Depreciation and amortization                                                                                                                                    |                          |                    | 1,003,958  |                      |            |                  | 1,534,905  |           
|                                 |                                                                                                                                                                  |                          |                    |            |                      |            |                  |           
|                                 |                                                                                                                                                                  | Total costs and expenses |                    |            | 71,802,839           |            |                  |            | 62,990,336 |           
|                                 |                                                                                                                                                                  |                          |                    |            |                      |            |                  |           
|OPERATING INCOME                 |                                                                                                                                                                  |                          | 6,955,172          |            |                      |            | 5,031,120        |           
|                                 |                                                                                                                                                                  |                          |                    |            |                      |            |                  |           
|OTHER INCOME (EXPENSE):          |                                                                                                                                                                  |                          |                    |            |                      |            |                  |           
|                                 | Interest expense                                                                                                                                                 |                          |                    | (3,587,361 | )                    |            |                  | (3,277,375 | )         
|                                 | Other income, net  (including interest) (includes related party income
of $1,061 and $14,551 in fiscal 2003 and 2002, respectively)                             |                          |                    | 16,117     |                      |            |                  | 21,429     |           
|                                 |                                                                                                                                                                  |                          |                    |            |                      |            |                  |           
|                                 |                                                                                                                                                                  |                          | Other expense, net |            |                      | (3,571,244 | )                |            |            | (3,255,946 | )
|                                 |                                                                                                                                                                  |                          |                    |            |                      |            |                  |           
|INCOME BEFORE INCOME TAX BENEFIT |                                                                                                                                                                  |                          | 3,383,928          |            |                      |            | 1,775,174        |           
|INCOME TAX PROVISION             |                                                                                                                                                                  |                          | (1,223,048         | )          |                      |            | (887,587         | )         
|                                 |                                                                                                                                                                  |                          |                    |            |                      |            |                  |           
|NET INCOME                       |                                                                                                                                                                  | $                        | 2,160,880          |            |                      | $          | 887,587          |           
|                                 |                                                                                                                                                                  |                          |                    |            |                      |            |                  |           

See accompanying notes to unaudited consolidated financial statements.

5



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|                                                        |                                                 |   |         |           |  |   |           |           | 
|------------------------------------------------------- | ----------------------------------------------- | - | ------- | --------- |  | - | --------- | --------- | 
|RETAINED EARNINGS:                                      |                                                 |   |         |           |  |   |           |          
|                                                        | Balance at beginning of period                  |   | $       | 974,909   |  |   | $         | 1,756,459 | 
|                                                        | Net income                                      |   |         | 2,160,880 |  |   |           | 887,587   | 
|                                                        | Contributions by special purpose leasing entity |   |         | 226,894   |  |   |           |          | 
|                                                        |                                                 |   |         |           |  |   |           |          
|                                                        | Balance at end of period                        |   | $       | 3,362,683 |  |   | $         | 2,644,046 | 
|                                                        |                                                 |   |         |           |  |   |           |          
|NET INCOME PER COMMON SHARE  BASIC AND                 |                                                 | $ |         |           |  | $ |           |          
|                                                        | DILUTED                                         |   |         | 21.61     |  |   |           | .15       | 
|WEIGHTED AVERAGE SHARES OUTSTANDING  BASIC AND
DILUTED |                                                 |   | 100,000 |           |  |   | 5,781,480 |          

See accompanying notes to unaudited consolidated financial statements.

6



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##### 



PIERRE FOODS, INC. AND SUBSIDIARIES______________________________________

Consolidated Statements of Operations and Retained Earnings

(Unaudited)

|                                                    |                                                                                                                                                                     |                          |                    |             |                         |             |                  |             |             |            |  
|--------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | ------------------ | ----------- | ----------------------- | ----------- | ---------------- | ----------- | ----------- | ---------- | -
|                                                    |                                                                                                                                                                     |                          |                    |             | Thirty-Nine Weeks Ended
|                                                    |                                                                                                                                                                     |                          |                    |             |                        
|                                                    |                                                                                                                                                                     |                          |                    |             | November 30, 2002       |             | December 1, 2001
|                                                    |                                                                                                                                                                     |                          |                    |             |                         |             |                 
|REVENUES                                            |                                                                                                                                                                     | $                        | 202,052,465        |             |                         | $           | 176,686,597      |            
|                                                    |                                                                                                                                                                     |                          |                    |             |                         |             |                  |            
|COSTS AND EXPENSES:                                 |                                                                                                                                                                     |                          |                    |             |                         |             |                  |            
|                                                    | Cost of goods sold (includes related party transactions totaling
$3,403,979 and $53,296 in fiscal 2003 and fiscal 2002, respectively)                               |                          |                    | 133,887,435 |                         |             |                  | 117,046,711 |            
|                                                    | Selling, general and administrative expenses (includes related party
transactions totaling $17,874,692 and $2,845,618 in fiscal 2003 and
fiscal 2002, respectively) |                          |                    | 52,607,857  |                         |             |                  | 45,439,107  |            
|                                                    | Loss on disposition of property, plant and equipment, net                                                                                                           |                          |                    | 4,916       |                         |             |                  | 48,707      |            
|                                                    | Depreciation and amortization                                                                                                                                       |                          |                    | 2,971,318   |                         |             |                  | 4,670,340   |            
|                                                    |                                                                                                                                                                     |                          |                    |             |                         |             |                  |            
|                                                    |                                                                                                                                                                     | Total costs and expenses |                    |             | 189,471,526             |             |                  |             | 167,204,865 |           
|                                                    |                                                                                                                                                                     |                          |                    |             |                         |             |                  |            
|OPERATING INCOME                                    |                                                                                                                                                                     |                          | 12,580,939         |             |                         |             | 9,481,732        |            
|                                                    |                                                                                                                                                                     |                          |                    |             |                         |             |                  |            
|OTHER INCOME (EXPENSE):                             |                                                                                                                                                                     |                          |                    |             |                         |             |                  |            
|                                                    | Interest expense                                                                                                                                                    |                          |                    | (10,620,612 | )                       |             |                  | (9,845,306  | )          
|                                                    | Other income, net  (including interest) (includes related party income
of $388,545 and $43,652 in fiscal 2003 and fiscal 2002, respectively)                       |                          |                    | 442,675     |                         |             |                  | 115,136     |            
|                                                    |                                                                                                                                                                     |                          |                    |             |                         |             |                  |            
|                                                    |                                                                                                                                                                     |                          | Other expense, net |             |                         | (10,177,937 | )                |             |             | (9,730,170 | )
|                                                    |                                                                                                                                                                     |                          |                    |             |                         |             |                  |            
|INCOME (LOSS) BEFORE INCOME TAX (PROVISION) BENEFIT |                                                                                                                                                                     |                          | 2,403,002          |             |                         |             | (248,438         | )          
|INCOME TAX (PROVISION) BENEFIT                      |                                                                                                                                                                     |                          | (1,026,862         | )           |                         |             | 124,219          |            
|                                                    |                                                                                                                                                                     |                          |                    |             |                         |             |                  |            
|NET INCOME (LOSS)                                   |                                                                                                                                                                     | $                        | 1,376,140          |             |                         | $           | (124,219         | )          
|                                                    |                                                                                                                                                                     |                          |                    |             |                         |             |                  |            

See accompanying notes to unaudited consolidated financial statements.

7



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##### 



|                                                        |                                                 |  |           |           |   |  |           |           |  
|------------------------------------------------------- | ----------------------------------------------- |  | --------- | --------- | - |  | --------- | --------- | -
|RETAINED EARNINGS:                                      |                                                 |  |           |           |   |  |           |          
|                                                        | Balance at beginning of period                  |  | $         | 2,768,845 |   |  | $         | 2,768,265 |  
|                                                        | Net income (loss)                               |  |           | 1,376,140 |   |  |           | (124,219  | )
|                                                        | Distributions by special purpose leasing entity |  |           | (782,302  | ) |  |           |          |  
|                                                        |                                                 |  |           |           |   |  |           |          
|                                                        | Balance at end of period                        |  | $         | 3,362,683 |   |  | $         | 2,644,046 |  
|                                                        |                                                 |  |           |           |   |  |           |          
|NET INCOME (LOSS) PER COMMON SHARE  BASIC AND          |                                                 |  |           |           |   |  |           |          
|                                                        | DILUTED                                         |  | $         | .44       |   |  | $         | (.02      | )
|WEIGHTED AVERAGE SHARES OUTSTANDING  BASIC AND
DILUTED |                                                 |  | 3,128,730 |           |   |  | 5,781,480 |          

See accompanying notes to unaudited consolidated financial statements.

8



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##### 



PIERRE FOODS, INC. AND SUBSIDIARIES______________________________________

Consolidated Statements of Cash Flows

(Unaudited)

|                                     |                                                                                          |                                                      |                                                           |                                                                    |             |                         |             |                  |            |           |            |  
|------------------------------------ | ---------------------------------------------------------------------------------------- | ---------------------------------------------------- | --------------------------------------------------------- | ------------------------------------------------------------------ | ----------- | ----------------------- | ----------- | ---------------- | ---------- | --------- | ---------- | -
|                                     |                                                                                          |                                                      |                                                           |                                                                    |             | Thirty-Nine Weeks Ended
|                                     |                                                                                          |                                                      |                                                           |                                                                    |             |                        
|                                     |                                                                                          |                                                      |                                                           |                                                                    |             | November 30, 2002       |             | December 1, 2001
|                                     |                                                                                          |                                                      |                                                           |                                                                    |             |                         |             |                 
|CASH FLOWS FROM OPERATING ACTIVITIES |                                                                                          |                                                      |                                                           |                                                                    |             |                         |             |                 
|                                     | Net income (loss)                                                                        |                                                      | $                                                         | 1,376,140                                                          |             |                         | $           | (124,219         | )         
|                                     |                                                                                          |                                                      |                                                           |                                                                    |             |                         |             |                 
|                                     | Adjustments to reconcile net income (loss) to net cash
provided by operating activities: |                                                      |                                                           |                                                                    |             |                         |             |                  |           
|                                     |                                                                                          |                                                      | Depreciation and amortization                             |                                                                    |             | 2,971,318               |             |                  |            | 4,670,340 |           
|                                     |                                                                                          |                                                      | Amortization of deferred loan origination fees            |                                                                    |             | 542,841                 |             |                  |            | 396,026   |           
|                                     |                                                                                          |                                                      | Loss on disposition of property, plant and equipment, net |                                                                    |             | 4,916                   |             |                  |            | 48,707    |           
|                                     |                                                                                          |                                                      | (Increase) decrease in other assets                       |                                                                    |             | 53,650                  |             |                  |            | (458,791  | )         
|                                     |                                                                                          |                                                      | Decrease in other long-term liabilities                   |                                                                    |             | (251,699                | )           |                  |            | (233,653  | )         
|                                     |                                                                                          |                                                      | Changes in operating assets and liabilities:              |                                                                    |             |                         |             |                  |            |           |           
|                                     |                                                                                          |                                                      |                                                           | Receivables                                                        |             |                         | (3,611,700  | )                |            |           | (1,223,854 | )
|                                     |                                                                                          |                                                      |                                                           | Inventories                                                        |             |                         | (3,662,574  | )                |            |           | 418,744    |  
|                                     |                                                                                          |                                                      |                                                           | Refundable income taxes, prepaid expenses and other
current assets |             |                         | (1,171,596  | )                |            |           | (252,407   | )
|                                     |                                                                                          |                                                      |                                                           | Trade accounts payable and other accrued liabilities               |             |                         | 8,160,176   |                  |            |           | 3,200,212  |  
|                                     |                                                                                          |                                                      |                                                           |                                                                    |             |                         |             |                 
|                                     |                                                                                          |                                                      |                                                           | Total adjustments                                                  |             |                         | 3,035,332   |                  |            |           | 6,565,324  |  
|                                     |                                                                                          |                                                      |                                                           |                                                                    |             |                         |             |                 
|                                     |                                                                                          |                                                      |                                                           | Net cash provided by operating activities                          |             |                         | 4,411,472   |                  |            |           | 6,441,105  |  
|                                     |                                                                                          |                                                      |                                                           |                                                                    |             |                         |             |                 
|CASH FLOWS FROM INVESTING ACTIVITIES |                                                                                          |                                                      |                                                           |                                                                    |             |                         |             |                 
|                                     |                                                                                          | Proceeds from sales of property, plant and equipment |                                                           |                                                                    | 83,000      |                         |             |                  | 1,000      |          
|                                     |                                                                                          | Capital expenditures                                 |                                                           |                                                                    | (12,659,840 | )                       |             |                  | (3,603,504 | )        
|                                     |                                                                                          |                                                      |                                                           |                                                                    |             |                         |             |                 
|                                     |                                                                                          |                                                      |                                                           | Net cash used in investing activities                              |             |                         | (12,576,840 | )                |            |           | (3,602,504 | )
|                                     |                                                                                          |                                                      |                                                           |                                                                    |             |                         |             |                 

See accompanying notes to unaudited consolidated financial statements.

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|                                                     |                                                 |                                                     |            |            |           |   |           |         |         |  
|---------------------------------------------------- | ----------------------------------------------- | --------------------------------------------------- | ---------- | ---------- | --------- | - | --------- | ------- | ------- | -
|CASH FLOWS FROM FINANCING ACTIVITIES                 |                                                 |                                                     |            |            |           |   |           |        
|                                                     | Net borrowings under revolving credit agreement |                                                     |            | 6,559,134  |           |   |           |        |        
|                                                     | Principal payments on long-term debt            |                                                     |            | (192,391   | )         |   |           | (58,067 | )      
|                                                     | Loan origination fees                           |                                                     |            | (1,583,467 | )         |   |           |        |        
|                                                     | Distributions by special purpose leasing entity |                                                     |            | (782,302   | )         |   |           |        |        
|                                                     |                                                 |                                                     |            |            |           |   |           |        
|                                                     |                                                 | Net cash provided (used in) by financing activities |            |            | 4,000,974 |   |           |         | (58,067 | )
|                                                     |                                                 |                                                     |            |            |           |   |           |        
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                 |                                                     | (4,164,394 | )          |           |   | 2,780,534 |        
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       |                                                 |                                                     | 4,577,982  |            |           |   | 1,813,185 |        
|                                                     |                                                 |                                                     |            |            |           |   |           |        
|CASH AND CASH EQUIVALENTS, END OF PERIOD             |                                                 | $                                                   | 413,588    |            |           | $ | 4,593,719 |        
|                                                     |                                                 |                                                     |            |            |           |   |           |        

See accompanying notes to unaudited consolidated financial statements.

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PIERRE FOODS, INC. AND SUBSIDIARIES______________________________________

Notes to Consolidated Financial Statements
(Unaudited)

1. Basis of Presentation

In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly the
financial position of the Company as of November 30, 2002 and March 2, 2002,
the results of operations for the thirteen weeks and thirty-nine weeks ended
November 30, 2002 and December 1, 2001, and the cash flows of the Company for
the thirty-nine weeks ended November 30, 2002 and December 1, 2001. Financial
statements for the year-to-date period ended December 1, 2001 (fiscal 2002)
have been reclassified, where applicable, to conform to financial statement
presentation used for the year-to-date period ended November 30, 2002 (fiscal
2003). The thirteen week period ended November 30, 2002 is referred to as
third quarter 2003 and the thirteen week period ended December 1, 2001 is
referred to as third quarter 2002.

The Company reports the results of its operations using a 52-53 week
basis. In line with this, each quarter of the fiscal year will contain 13
weeks except for the infrequent fiscal years with 53 weeks.

The results of interim operations for fiscal 2003 are not necessarily
indicative of the results to be expected for the full fiscal year. These
interim unaudited consolidated financial statements should be read in
conjunction with the Companys March 2, 2002 audited consolidated financial
statements and notes thereto.

2. Inventories

A summary of inventories, by major classifications, follows:

|                       |       |   |                   |            |               |   |            |            | 
|---------------------- | ----- | - | ----------------- | ---------- | ------------- | - | ---------- | ---------- | 
|                       |       |   | November 30, 2002 |            | March 2, 2002
|                       |       |   |                   |            |              
|Manufacturing supplies |       | $ | 1,273,940         |            |               | $ | 1,199,647  |           
|Raw materials          |       |   | 5,500,503         |            |               |   | 4,975,188  |           
|Finished goods         |       |   | 20,740,986        |            |               |   | 17,678,020 |           
|                       |       |   |                   |            |               |   |            |           
|                       | Total |   | $                 | 27,515,429 |               |   | $          | 23,852,855 | 
|                       |       |   |                   |            |               |   |            |           

3. Intangible Assets

The Company adopted FASB Statement of Financial Accounting Standards No.
142 (SFAS 142), Goodwill and Other Intangible Assets, effective March 3,
2002. SFAS 142 requires, among other things, the discontinuance of goodwill
amortization. In addition, the standard includes provisions for the
reclassification of certain existing recognized intangibles as goodwill,
reassessment of the useful lives of existing recognized intangibles,
reclassification of certain intangibles out of previously reported goodwill and
the identification of reporting units for purposes of assessing potential
future impairments of goodwill. As a result, during first quarter 2002, the
assembled work force with an amortized balance of $2,171,067 was reclassified
as goodwill. In addition, the intangible asset established for trade name is
deemed to have an indefinite life because the trade name is expected to
generate cashflows indefinitely. Accordingly, amortization of both goodwill
and tradename has been discontinued.

As required by FAS 142, during second quarter 2002, the Company completed
its first step transitional goodwill impairment test. The results of the first
step transitional impairment test indicate that the revised goodwill amount of
$29,019,571 may be impaired. Since the first step transitional test indicates
that goodwill may be impaired, a second step

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transitional test is required to be completed by March 1, 2003. Any
impairment loss resulting from the second step transitional impairment test
would be recorded as a cumulative effect of a change in accounting principle
effective March 3, 2002. Accordingly, the financial statements for interim
quarters of fiscal 2003 would be restated for any such impairment loss. The
reason for the potential impairment loss is the result of the change (effective
March 3, 2002) in the evaluation criteria for goodwill from an undiscounted
cash flow approach, which was previously utilized under the guidance in
Accounting Principles Board Opinion No. 17, to the fair value approach which is
stipulated in SFAS 142.

As of November 30, 2002, the Company had the following acquired intangible
assets recorded:

|                                         |            |       |            |                   |            |                   |            |                   |             |   |            |            |            | 
|---------------------------------------- | ---------- | ----- | ---------- | ----------------- | ---------- | ----------------- | ---------- | ----------------- | ----------- | - | ---------- | ---------- | ---------- | 
|                                         |            |       |            | November 30, 2002 |            | November 30, 2002 |            | November 30, 2002
|                                         |            |       |            | Gross Carrying    |            | Accumulated       |            | Net Carrying     
|                                         |            |       |            | Amount            |            | Amortization      |            | Amount           
|                                         |            |       |            |                   |            |                   |            |                  
|Goodwill                                 |            | $     | 33,571,687 |                   |            | $                 | (4,552,116 | )                 |             | $ | 29,019,571 |           
|                                         |            |       |            |                   |            |                   |            |                   |             |   |            |           
|Intangible assets with
indefinite lives: |            |       |            |                   |            |                   |            |                   |             |   |            |           
|                                         | Trade name |       | $          | 44,340,000        |            |                   | $          | (5,531,364        | )           |   | $          | 38,808,636 |           
|                                         |            |       |            |                   |            |                   |            |                   |             |   |            |           
|                                         |            | Total |            | $                 | 77,911,687 |                   |            | $                 | (10,083,480 | ) |            | $          | 67,828,207 | 
|                                         |            |       |            |                   |            |                   |            |                   |             |   |            |           

As required by SFAS 142, the results for first, second and third quarters
2002 have not been restated. The table below presents the effect on net loss
and loss per share as if SFAS 142 had been in effect for first, second and
third quarters 2002:

|                                                 |                            |   |                   |       |                  |   |           |      |  
|------------------------------------------------ | -------------------------- | - | ----------------- | ----- | ---------------- | - | --------- | ---- | -
|                                                 |                            |   | Thirty-Nine       |       | Thirty-Nine     
|                                                 |                            |   | Weeks Ended       |       | Weeks Ended     
|                                                 |                            |   | November 30, 2002 |       | December 1, 2001
|                                                 |                            |   |                   |       |                 
|Reported net income (loss)                       |                            |   |                   |       |                  |   |           |     
|Add back:                                        |                            | $ | 1,376,140         |       |                  | $ | (124,219  | )   
|Goodwill and tradename amortization (net of tax) |                            |   |                  |       |                  |   | 1,010,064 |     
|                                                 |                            |   |                   |       |                  |   |           |     
|Adjusted net income                              |                            | $ | 1,376,140         |       |                  | $ | 885,845   |     
|                                                 |                            |   |                   |       |                  |   |           |     
|Basic and diluted net income (loss) per share:   |                            |   |                   |       |                  |   |           |     
|                                                 | Reported net income (loss) |   | $                 | 13.76 |                  |   | $         | (.02 | )
|                                                 | Adjusted net income        |   | $                 | 13.76 |                  |   | $         | .15  |  

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4. Long-Term Debt

Effective May 29, 2002, the Company terminated its $25 million credit
facility, and obtained a new five-year variable rate secured credit facility in
an aggregate amount up to $50 million. The new facility includes a $16 million
term loan subline, a $10 million capital expenditures subline and a $7 million
letter of credit subfacility. The collateral for the facility includes
substantially all of the Companys assets. As of November 30, 2002, the
Company had borrowings under this new facility of $6.6 million and borrowing
availability of approximately $8.6 million. As of December 1, 2001, the
Company had no borrowings under its former $25 million credit facility and
borrowing availability of approximately $20.9 million. In addition, at
November 30, 2002 and December 1, 2001, the Company was in compliance with the
financial covenants under each facility. (see Item 5 Other Information)

The Companys Chairman and Vice Chairman agreed to guarantee payment of
the new $50 million facility in exchange for guarantee fees to be paid annually
in advance, equal to 1.5% each of the amount committed for lending under the
facility. During the fiscal period ended November 30, 2002, $750,000 was paid
to each of the Companys Chairman and Vice Chairman, and as of November 30,
2002, $375,000 each had been amortized.

5. Common Stock

On July 26, 2002, PF Management, Inc. closed its management buyout of the
Company. This going-private transaction resulted in the exchange of each share
of common stock owned by a person other than PF Management for the right to
receive $2.50 in cash. There were 5,781,480 shares issued and outstanding
immediately before the closing. Of that amount, 2,151,268 shares were owned by
persons other than PF Management. After the closing, the Company amended and
restated its Articles of Incorporation to authorize the issuance of up to
100,000 shares of Class A common stock as the only authorized class of capital
stock of the Company. All 100,000 shares of authorized common stock have been
issued to PF Management.

6. Comprehensive Income

Total comprehensive income (loss) is comprised solely of net income (loss)
in fiscal 2003 and fiscal 2002. Comprehensive income (loss) was $2,160,880 and
$887,587 for the third quarter 2003 and the third quarter 2002, respectively;
and $1,376,140 and $(124,219) for fiscal 2003 and fiscal 2002, respectively.

7. Supplemental cash flow disclosures  cash paid (received) during the period

|                                     |  |                   |           |                  |  |   |           |  
|------------------------------------ |  | ----------------- | --------- | ---------------- |  | - | --------- | -
|                                     |  | Thirty-Nine       |           | Thirty-Nine     
|                                     |  | Weeks Ended       |           | Weeks Ended     
|                                     |  | November 30, 2002 |           | December 1, 2001
|                                     |  |                   |           |                 
|Interest                             |  | $                 | 7,020,922 |                  |  | $ | 6,393,473 |  
|                                     |  |                   |           |                  |  |   |          
|Income taxes net of refunds received |  | $                 | (68,506   | )                |  | $ | (327,554  | )
|                                     |  |                   |           |                  |  |   |          

8. Recently Issued Accounting Guidance.

In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 142 (SFAS 142), Goodwill and Other Intangible Assets. See Note 3 for
discussion of the Companys adoption of SFAS 142.

In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 143 (SFAS 143), Accounting for Asset Retirement Obligations, which is
effective for the Company beginning March 3, 2002. SFAS 143 addresses
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the

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associated asset retirement cost. The adoption of SFAS 143 did not have a
material impact on the Companys financial position and results of operations.

In August 2001, the FASB issued Statement of Financial Accounting
Standards No. 144 (SFAS 144), Accounting for the Impairment or Disposal of
Long-Lived Assets, which is effective for the Companys fiscal year beginning
March 3, 2002. SFAS 144 addresses the financial accounting and reporting for
the impairment or disposal of long-lived assets. The adoption of SFAS 144 did
not have a material impact on the Companys financial position and results of
operations.

9. Related Party Transactions

Effective March 3, 2002, the Company entered into a one-year logistics
agreement with PF Distribution, LLC (PF Distribution), owned 50% each by the
Companys Chairman and Vice Chairman. Under the agreement, PF Distribution
will serve as an exclusive logistics agent for the Company, and will provide
all warehousing, fulfillment and transportation services to the Company. In
the third quarter 2003, distribution expense recorded in selling, general and
administrative expense was approximately $4.7 million. In fiscal 2003,
distribution expense recorded in selling, general and administrative expense
was approximately $16.9 million, of which approximately $16.0 million had been
paid to PF Distribution as of November 30, 2002.

All other related party transactions are consistent with those described
at March 2, 2002.

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

Results of Operations

Third Quarter 2003 Compared to Third Quarter 2002

Revenues, net.Net revenues increased by $10.7 million, or 15.8%. The
increase in net revenues was primarily due to the substantial development of
new customers, to the introduction of a new sandwich line within the
foodservice distribution channel, and to increased revenues in existing product
lines.

Cost of goods sold.Cost of goods sold increased by $7.3 million, or
16.1%. As a percentage of revenues, cost of goods sold increased from 66.6% to
66.9%. This increase primarily was due to a change in product mix to lower
margin products and unfavorable insurance and utilities expense, offset by a
decrease in beef raw material prices. Production efficiencies remained
consistent with third quarter 2002, as did the cost of labor.

Selling, general and administrative. Selling, general and administrative
expenses increased by $2.1 million, or 12.8%, primarily due to an increase in
costs to support the increase in sales volume. As a percentage of
revenues, selling, general and administrative expenses decreased from 23.6% to
23.0%.

Depreciation and amortization.Depreciation and amortization expense
decreased by $0.5 million, or 34.6%, due primarily to the adoption of SFAS 142
in fiscal 2003 which discontinued amortization of goodwill and intangibles with
indefinite lives.

Other expense, net. The primary component of net other expense for third
quarter 2003 and third quarter 2002 is interest expense. Interest expense
consists primarily of interest on fixed rate long-term debt (see - Liquidity
and Capital Resources below). Net other expense increased by $0.3 million or
9.7% in fiscal year 2003.

Income taxes. The effective tax rate for third quarter 2003 was 36.1%
compared to 50.0% for third quarter 2002. The decrease in the effective tax
rate is due primarily to the effects of permanent timing differences and
compensation deduction limitations in fiscal 2002.

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Fiscal 2003 Compared to Fiscal 2002

Revenues, net.Net revenues increased by $25.4 million, or 14.4%. The
increase in net revenues was primarily due to the substantial development of
new customers, to the introduction of a new sandwich line within the
foodservice distribution channel, and to increased revenues in existing product
lines.

Cost of goods sold.Cost of goods sold increased by $16.8 million, or
14.4%. As a percentage of revenues, cost of goods sold increased from 66.2% to
66.3%. This increase primarily was due to a change in product mix to lower
margin products and unfavorable insurance and utilities expense, offset by a
decrease in beef raw material prices. The cost of labor for fiscal 2003 was
consistent with fiscal 2002.

Selling, general and administrative. Selling, general and administrative
expenses increased by $7.2 million, or 15.8%, primarily due to an increase in
costs to support the increase in sales volume. As a percentage of
revenues, selling, general and administrative expenses increased from 25.7% to
26.0%.

Depreciation and amortization.Depreciation and amortization expense
decreased by $1.7 million, or 36.4%, due primarily to the adoption of SFAS 142
in fiscal 2003 which discontinued amortization of goodwill and intangibles with
indefinite lives.

Other expense, net. The primary component of net other expense for
fiscal 2003 and fiscal 2002 is interest expense. Interest expense consists
primarily of interest on fixed rate long-term debt (see - Liquidity and
Capital Resources below). Net other expense increased by $0.4 million or
4.6%.

Income taxes. The effective tax rate for fiscal 2003 was 42.7% compared
to 50.0% for fiscal 2002. The decrease in the effective tax rate is due
primarily to the effects of permanent timing differences and compensation
deduction limitations in fiscal 2002.

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Liquidity and Capital Resources

Net cash provided by operating activities was $4.4 million for fiscal
2003, as compared to $6.4 million for fiscal 2002. The primary components of
the change in net cash provided by operating activities were 1) an increase in
inventory of $3.7 million due to the seasonal building of inventories; 2) an
increase in accounts receivable of $3.6 million; and 3) an increase in
refundable income taxes, prepaid expenses and other current assets of $1.2
million; offset by 4) an increase in accounts payable and other accrued
liabilities of $5.1 million; 5) an increase in accrued interest of $3.1
million; and 6) a decrease in depreciation and amortization expense of $1.7
million primarily due to the discontinuance of amortization of goodwill under
FAS 142.

Net cash used in investing activities was $12.6 million for fiscal 2003,
compared to $3.6 million for fiscal 2002, due to an increase in capital
expenditures for plant improvements and a plant expansion.

Net cash provided by financing activities was $4.0 million for fiscal
2003, compared to net cash used in financing activities of $0.1 million for
fiscal 2002. The increase in cash provided by financing activities was due
primarily to an increase in borrowings under the revolving credit facility of
$6.6 million for fiscal 2003 compared to fiscal 2002, offset by loan
origination fees of $1.6 million incurred in fiscal 2003 that did not occur in
fiscal 2002 and special purpose entity member distributions of $0.8 million
incurred in fiscal 2003 that did not occur in fiscal 2002.

Effective May 29, 2002, the Company terminated its $25 million credit
facility. Also, effective May 29, 2002, the Company obtained a five-year
variable-rate $50 million revolving credit facility from a new lender, which
includes a $16 million term loan subline, a $10 million capital expenditures
subline and a $7 million letter of credit subfacility. Funds available under
this facility are available for working capital requirements, permitted
investments and general corporate purposes. Borrowings under the facility bear
interest at floating rates based upon the interest rate option selected from
time to time by the Company and are secured by a first-priority security
interest in substantially all of the Companys assets. In addition, the
Company is required to satisfy certain financial covenants regarding cash flow
and capital expenditures.

As of November 30, 2002, the Company had borrowings under this new
facility of $6.6 million and borrowing availability of approximately $8.6
million. As of December 1, 2001, the Company had no borrowings under its
former $25 million credit facility and borrowing availability of approximately
$20.9 million. In addition, at November 30, 2002 and December 1, 2001, the
Company was in compliance with the financial covenants under each of the
facilities. (see Item 5 Other Information)

The Company has budgeted approximately $0.6 million for capital
expenditures for the remainder of fiscal 2003. These expenditures are primarily
for routine food processing capital improvement projects and other
miscellaneous expenditures. The Company believes that funds from operations
and funds from the $50 million credit facility, as well as the Companys
ability to enter into capital or operating leases, will be adequate to finance
these capital expenditures.

If the Company continues its historical revenue growth trend as expected,
then the Company will be required to raise and invest additional capital for
additional plant expansion projects to provide operating capacity to satisfy
increased demand. Management believes that future cash requirements for these
plant expansion projects would need to be met through other long-term financing
sources, such as an increase in borrowing availability under the $50 million
credit facility, the issuance of industrial revenue bonds or equity investment.
The incurrence of additional long-term debt is governed and restricted by the
Companys existing debt instruments. Furthermore, there can be no assurance
that additional long-term financing will be available on advantageous terms (or
any terms) when needed by the Company.

The Company anticipates continued sales growth in key market areas. As
noted above, however, this growth will require future capital expansion
projects to increase existing plant capacity to satisfy increased demand.
Sales growth, improved operating performance and expanded plant capacity  none
of which is assured  will be necessary for the Company to continue to service
existing debt.

17



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Logistics Agreement

Effective March 3, 2002, the Company entered into a one-year logistics
agreement with PF Distribution, LLC (PF Distribution), owned 50% each by the
Companys Chairman and Vice Chairman. Under the agreement, PF Distribution
will serve as an exclusive logistics agent for the Company, and will provide
all warehousing, fulfillment and transportation services to the Company. The
cost of PF Distributions services is based on flat rates per pound, which are
calculated based on weight and volume characteristics of products, inventory
pounds maintained and inventory pounds shipped. Rates were determined based on
historical costs and industry standards. In the third quarter 2003,
distribution expense recorded in selling, general and administrative expense
was approximately $4.7 million. In fiscal 2003, distribution expense recorded
in selling, general and administrative expense was approximately $16.9 million,
of which approximately $16.0 million had been paid to PF Distribution as of
November 30, 2002.

Seasonality

Except for sales to school districts, which represent approximately 26% of
total sales and which decline during the early spring and summer and early
January, there is no significant seasonal variation in sales.

Management Buyout

On July 26, 2002, the Companys shareholders approved the Amended and
Restated Agreement and Plan of Share Exchange dated as of December 20, 2001,
and amended as of June 20, 2002 and the management buyout of the Company was
completed on July 26, 2002. The Company is now a wholly-owned subsidiary of PF
Management, Inc.

18



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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As discussed in its annual report for the fiscal year ended March 2, 2002,
the Company is exposed to market risks stemming from changes in interest rates,
foreign exchange rates and commodity prices. Changes in these factors could
cause fluctuations in the Companys financial condition, results of operations
and cash flows. The Company owned no derivative financial instruments or
nonderivative financial instruments held for trading purposes at November 30,
2002 or March 2, 2002. Certain of the Companys outstanding nonderivative
financial instruments at November 30, 2002 are subject to interest rate risk,
but not subject to foreign currency or commodity price risk.

The Companys major market risk exposure is potential loss arising from
changing interest rates and its impact on long-term debt. The Companys policy
is to manage interest rate risk by maintaining a combination of fixed and
variable rate financial instruments in amounts and with maturities that
management considers appropriate. The risks associated with long-term debt at
November 30, 2002 have not changed materially since
March 2, 2002. Of the long-term debt outstanding at
November 30, 2002, the $115.0 million of Senior Notes accrued
interest at a fixed rate, while the $6.6 million of outstanding
borrowings under the revolving credit facility and the $5.7 million
of obligation of special purpose entity accrued interest at variable
rates. A rise in prevailing interest rates could have adverse
effects on the Companys financial condition and results of
operations. A 25 basis point increase in the reference rates for the
Companys average variable rate debt outstanding during fiscal
2003 would have decreased net income for that period by
approximately $40,000.

Cautionary Statement As To Forward Looking Information

Certain statements made in this document are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve risks and uncertainties that may cause
actual results to differ materially from expected results. These risks and
uncertainties include: substantial leverage and insufficient cash flow from
operations; restrictions imposed by the Companys debt instruments; management
control; restriction of payment of dividends; competitive considerations;
government regulation; general risks of the food industry; adverse changes in
food costs and availability of supplies; dependence on key personnel and
potential labor disruptions. This list of risks and uncertainties is not
exhaustive. Also, new risk factors emerge over time. Investors should not
place undue reliance on the predictive value of forward-looking statements.

ITEM 4. CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Companys management, including the Companys President and Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of the Companys disclosure controls and procedures, as defined in
Exchange Act Rule 15d-14(c). Based upon that evaluation, the Companys
President and Chief Executive Officer and Chief Financial Officer concluded
that the Companys disclosure controls and procedures are effective in enabling
the Company to record, process, summarize and report information required to be
included in the Companys periodic SEC filings within the required time period.
There have been no significant changes in the Companys internal controls or
in other factors that could significantly affect internal controls subsequent
to the date the Company carried out its evaluation.

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PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION

On November 6, 2002, the Company received a notice of default from Cede &
Co., a nominee for the Depository Trust Company (DTC), as the recordholder
for the beneficial owners of $50,480,000 million in principal amount of the
Companys 10-3/4% Senior Notes due 2006 (the Notes). This notice alleged
that the Company was in non-financial default of the Indenture governing the
Notes. The Company disagrees that it has violated any Indenture covenants.

On November 21, 2002, the Company received a letter from its lender,
Foothill Capital Corporation (Foothill), stating that the Company was in
technical default of its Loan and Security Agreement with Foothill due to the
alleged default under the Indenture. However, Foothill has continued to
provide funds to the Company under the Agreement, including providing the
Company with the funds necessary to make the interest payment due to the
Noteholders under the Indenture on December 2, 2002.

On or about December 27, 2002, the Company received an acceleration notice
given by DTC on behalf of the beneficial owners of $44,980,000 million in
principal amount of the Notes. This notice said that the due date of the Notes
was being accelerated based on the Companys failure to cure the alleged
defaults described in the November 6 letter. On December 31, 2002, the Company
sent a letter to all Noteholders, in care of U.S. Bank, N.A., the Indenture
trustee (the Trustee), reiterating its position that the Company had violated
no Indenture covenants and that there was therefore no basis for accelerating
the Notes.

On January 6, 2003, the Company received a letter from counsel to the
Trustee requesting instructions from the Company with respect to action the
Trustee should take in light of the alleged default under the Indenture, and
has asked the Company to provide information in response to the alleged
default. The Company expects to provide this information to the Trustee on or
about the date of this report.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

|    |  |                                                             
|--- |  | ------------------------------------------------------------
|(a) |  | Exhibits                                                    
|    |  | See the Index to Exhibits provided elsewhere in this report.
|(b) |  | Reports on Form 8-K                                         
|    |  | None                                                        
|(c) |  | Other Filings                                               
|    |  | None                                                        

20



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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.

|                       |  |                    |  |                                                                                                               
|---------------------- |  | ------------------ |  | --------------------------------------------------------------------------------------------------------------
|                       |  | PIERRE FOODS, INC.
|                      
|                       |  |                    |  |                                                                                                               
|                      
|Date: January 14, 2003 |  | By:                |  | /s/ Norbert E.
WoodhamsNorbert E. Woodhams
President and Chief Executive Officer
(Principal Executive Officer)
|                      
|                       |  |                    |  |                                                                                                               
|                      
|Date: January 14, 2003 |  | By:                |  | /s/ Pamela M. WittersPamela M. Witters
Chief Financial Officer
(Principal Financial Officer)                  

21



---



##### 



CERTIFICATIONS

I, Norbert E. Woodhams, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Pierre Foods,
Inc.;

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

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

4.     The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| | a. |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c. |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
registrants board of directors (or persons performing the equivalent
function):



| | a. |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        

6.     The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                       |  |                                                                                                               
|---------------------- |  | --------------------------------------------------------------------------------------------------------------
|Date: January 14, 2003 |  |                                                                                                               
|                      
|                       |  |                                                                                                               
|                      
|                       |  | /s/ Norbert E. WoodhamsNorbert E. Woodhams
President and Chief Executive Officer
(Principal Executive Officer)

22



---



##### 



I, Pamela M. Witters, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Pierre Foods,
Inc.;

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

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

4.     The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| | a. |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c. |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
registrants board of directors (or persons performing the equivalent
function):



| | a. |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        

6.     The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                       |  |                                                                                             
|---------------------- |  | --------------------------------------------------------------------------------------------
|Date: January 14, 2003 |  |                                                                                             
|                      
|                       |  |                                                                                             
|                      
|                       |  | /s/ Pamela M. WittersPamela M. Witters
Chief Financial Officer
(Principal Financial Officer)

23



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##### 



INDEX TO EXHIBITS

|            |  |                                                                                                                                                                                                                                                                                                           
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                               
|            |  |                                                                                                                                                                                                                                                                                                           
|3.1         |  | Restated Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Companys Registration Statement on Form
S-4 (No. 333-58711))                                                                                                                                          
|3.2         |  | Amended and Restated Bylaws of Pierre Foods, Inc., dated September 18,
2002 (incorporated by reference to Exhibit 10.6 to the Companys Quarterly
Report on Form 10-Q for its fiscal quarter ended August 31, 2002)                                                                                       
|3.3         |  | Articles of Restatement of Pierre Foods, Inc., dated July 30, 2002
(incorporated by reference to Exhibit 3.3 to the Companys Quarterly
Report on Form 10-Q for its fiscal quarter ended August 31, 2002)                                                                                                 
|4.1         |  | Note Purchase Agreement, dated June 4, 1998, among the Company, the
Guarantors and the Initial Purchasers (incorporated by reference to
Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the SEC
on June 24, 1998)                                                                      
|4.2         |  | Indenture, dated as of June 9, 1998, among the Company, certain
Guarantors and State Street Bank and Trust Company, Trustee (incorporated
by reference to Exhibit 4.2 to the Companys Current Report on Form 8-K
filed with the SEC on June 24, 1998)                                                    
|4.3         |  | Registration Rights Agreement, dated June 9, 1998, among the Company,
certain Guarantors and certain Initial Purchasers (incorporated by
reference to Exhibit 4.3 to the Companys Current Report on Form 8-K filed
with the SEC on June 24, 1998)                                                        
|4.4         |  | Form of Initial Global Note (included as Exhibit A to Exhibit 4.2 to the
Companys Current Report on Form 8-K filed with the SEC on June 24, 1998
and incorporated herein by reference)                                                                                                                   
|4.5         |  | Form of Initial Certificated Note (included as Exhibit B to Exhibit 4.2
to the Companys Current Report on Form 8-K filed with the SEC on June 24,
1998 and incorporated herein by reference)                                                                                                             
|4.6         |  | Form of Exchange Global Note (included as Exhibit C to Exhibit 4.2 to the
Companys Current Report on Form 8-K filed with the SEC on June 24, 1998
and incorporated herein by reference)                                                                                                                  
|4.7         |  | Form of Exchange Certificated Note (included as Exhibit D to Exhibit 4.2
to the Companys Current Report on Form 8-K filed with the SEC on June 24,
1998 and incorporated herein by reference)                                                                                                            
|4.8         |  | First Supplemental Indenture, dated as of September 5, 1998, among the
Company, State Street Bank and Trust Company, Trustee, and Pierre Leasing,
LLC (incorporated by reference to Exhibit 4.8 to Pre-Effective amendment
No. 1 to the Companys Registration Statement on Form S-4 (No. 333-58711))     
|4.9         |  | Second Supplemental Indenture dated as of February 26, 1999 among the
Company, State Street Bank and Trust Company, Trustee, and Fresh Foods
Restaurant Group, LLC (incorporated by reference to Exhibit 4.9 to the
Companys Quarterly Report on Form 10-Q for its fiscal quarter ended
December 4, 1999)
|4.10        |  | Third Supplemental Indenture dated as of October 8, 1999 between the
Company and State Street Bank and Trust Company, Trustee (incorporated by
reference to Exhibit 4.10 to the Companys Quarterly Report on Form 10-Q
for its fiscal quarter ended December 4, 1999)                                    
|10.1        |  | Waiver and Release of Change in Control Agreement to the Company by David
R. Clark, dated as of October 17, 2002                                                                                                                                                                                          
|10.2        |  | Waiver and Release of Change in Control Agreement to the Company by James
C. Richardson, Jr., dated as of October 21, 2002                                                                                                                                                                                

24



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##### 



|            |  |                                             
|----------- |  | --------------------------------------------
|Exhibit No. |  | Description                                 
|            |  |                                             
|99.1        |  | Risk Factors                                
|99.2        |  | Written Statement of Chief Executive Officer
|99.3        |  | Written Statement of Chief Financial Officer

The Company hereby agrees to provide to the Commission, upon request,
copies of long-term debt instruments omitted from this report pursuant to Item
601(b)(4)(iii)(A) of Regulation S-K under the Securities Act.

25