<PAGE>
                                                                               .
                                                                               .
                                                                               .

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K

<Table>
<C>       <S>
   [X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

          FOR THE FISCAL YEAR ENDED JUNE 29, 2003

                                  OR

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

          FOR THE TRANSITION PERIOD FROM          TO
</Table>

                         COMMISSION FILE NUMBER 0-25294
                               RIVIANA FOODS INC.
             (Exact name of Registrant as specified in its charter)

<Table>
<S>                                            <C>
                   DELAWARE                                      76-0177572
           (State of Incorporation)                 (I.R.S. Employer Identification No.)

              2777 ALLEN PARKWAY                                 77019-2141
                HOUSTON, TEXAS                                   (Zip Code)
   (Address of principal executive offices)
</Table>

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 529-3251

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                     NONE.

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                    COMMON STOCK, PAR VALUE $1.00 PER SHARE
                                (Title of Class)

     Indicate by check mark whether 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 Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes [X]     No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ ]

     As of August 26, 2003 the aggregate market value of Registrant's voting
stock held by non-affiliates of the Registrant was approximately $180,058,000.

     The number of shares of Common Stock of the Registrant, par value $1.00 per
share, outstanding at August 26, 2003 was 14,335,686.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of Registrant's definitive Proxy Statement for the 2003 Annual
Meeting of Stockholders to be held October 15, 2003 (the "Proxy Statement") are
incorporated by reference into Part III, Items 10, 11, 12 and 13.
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

     Riviana Foods Inc. ("Riviana", the "Company", or the "Registrant") was
incorporated on January 31, 1986. The Company's predecessors date back to 1911
when Frank A. Godchaux began the amalgamation of 25 rice mills in southwest
Louisiana.

     Riviana processes, markets and distributes rice products in the United
States, cookies, crackers, fruit juices, nectars and drinks, and processed
fruits and vegetables in Central America, and rice and other food products in
Europe. For fiscal 2003, the Company's domestic operations accounted for
approximately 64% and 75% of net sales and operating income before general
corporate expenses, respectively, and operations in Central America and Europe
accounted for approximately 22% and 14% of net sales and 23% and 2% of operating
income before general corporate expenses, respectively.

     Riviana's domestic operations consist primarily of sales of retail branded
and private label rice products, sales of rice products to retail foodservice
chains and to major food processors, sales of rice by-products to industrial
users and export sales of branded and value-added rice products to Puerto Rico
and a number of international markets.

     By volume, Riviana is the largest seller of retail branded and private
label rice products in the United States, offering a variety of products in each
of the retail rice industry's four categories: dried rice (milled white and
parboiled rice), instant rice (rice that cooks in 10 minutes or less),
easy-to-prepare, flavored rice mixes (specialty mixes) and brown rice.

     The Company's domestic sales by hundredweight ("cwt") of retail rice
products have grown at a compound annual rate of 1% from fiscal 1999 to 2003.
The Company believes its consistent growth has resulted from its longstanding
national presence and reputation for quality, and its ability to develop and
market easy-to-prepare, value-added instant and specialty mix products.

     The Company markets its branded products under a number of nationally
recognized brand names including:

          MAHATMA(R) -- the best selling brand of packaged long grain rice in
     the U.S. for eleven years.

          SUCCESS(R) -- the leading brand of instant boil-in-bag rice and the
     second leading brand of instant rice in the U.S.

          CAROLINA(R) -- one of the leading brands of packaged long grain rice
     in the northeastern and mid-Atlantic U.S.

          WATERMAID(R) -- the leading brand of medium grain rice in the south
     and southeastern U.S.

          RIVER(R) -- the top-selling brand of packaged medium grain rice in
     several northeastern and mid-Atlantic U.S. markets.

          S&W(R) -- the best selling brand of packaged long grain rice in the
     Pacific northwest.

          GOURMET HOUSE(R) -- one of the leading brands of packaged wild rice in
     the U.S.

          CHINA DOLL(R) -- one of the leading brands of packaged rice and
     packaged beans in Alabama, Mississippi and Florida.

     Riviana also markets a variety of easy-to-prepare, flavored rice mixes
under the Mahatma(R), Carolina(R) and Success(R) brand names, including
Mahatma(R) brand Saffron Yellow Rice, Red Beans & Rice, Spanish Rice, Black
Beans & Rice, Spicy Saffron Yellow Rice, Nacho Cheese Rice, Long Grain & Wild
Rice, Broccoli & Cheese Rice and Beef Rice, Carolina(R) brand Saffron Yellow
Rice, Black Beans & Rice, Pilaf Rice, Long Grain & Wild Rice, Chicken Rice and
Spanish Rice and Success(R) brand Saffron Yellow Rice, Brown & Wild Rice,
Broccoli & Cheese Rice, Red Beans & Rice, Grilled Chicken & Broccoli Rice and
Cheesy Rice.

                                        1
<PAGE>

     In addition to its branded products, the Company supplies a full range of
private label rice products -- dried rice, instant rice, rice mixes and brown
rice -- to numerous food retailers, including 19 of the top 20 retailers in the
United States. In July 1998, the Company also began marketing and distributing
retail rice products in the United States, the Bahamas and U.S. military
commissaries for Riceland Foods, Inc., with whom it also participates in rice
flour milling and co-generation projects.

     The Company supplies parboiled and instant rice in bulk to a number of the
nation's major food processors for use as an ingredient in other food products.
The Company markets a range of foodservice products, principally instant rice,
parboiled rice, and rice mixes, to several of the top restaurant chains and
foodservice companies in the United States. Additionally, the Company sells bulk
rice and rice by-products to industrial users.

     Riviana exports brand name and value-added rice products to Puerto Rico and
a number of foreign countries. The Company's Puerto Rican brands, El Mago(R),
Sello Rojo(R) and Mahatma(R), represent approximately 19% of the total Puerto
Rican retail rice market, where per capita rice consumption is approximately
five times the United States level. The Company also exports bulk, brand name
and private label rice products to Canada, Mexico, Central America and countries
in the Caribbean, Europe, Africa and the Middle East.

     In Central America, the Company operates as one of the largest
manufacturers of cookies and crackers and one of the largest processors of
fruits and vegetables through Pozuelo, S.A. ("Pozuelo") and Alimentos Kern de
Guatemala, S.A. ("Kern"). In cookies and crackers, Costa Rica is the largest
market, followed by Guatemala and El Salvador. In processed fruits and
vegetables, the Company produces a wide variety of products, including fruit
nectars and juices, fruit drinks, tomato products and refried beans. These
products are sold principally in Central America with the largest markets being
Guatemala, Costa Rica and El Salvador. Exports, including refried beans exported
to the United States, represent a part of the Central American business. Many of
the Company's primary brand name products are market leaders in Central America
in their respective categories.

     In Europe, the Company is a distributor of rice and other food products
through its subsidiary, Stevens & Brotherton Ltd. ("S&B") and a major rice
miller, marketer and distributor of rice products through its subsidiary, N & C
Boost N.V. ("N&C"). S&B, a United Kingdom subsidiary, distributes a variety of
brand name and private label products including rice, dried fruits, and canned
and frozen fruits and vegetables to retail, wholesale, foodservice and
industrial customers. The products distributed by S&B are all produced by other
manufacturers and generate a lower gross profit margin than other Riviana
operations.

     N&C, a Belgian subsidiary, competes in the continental European rice market
through its interest in Boost Nutrition C.V. in Belgium and its subsidiary,
Euryza Reis GmbH in Germany, (collectively "Boost"). Boost is accounted for as
an unconsolidated affiliate and is jointly owned by N&C and the Herba Rice
Division of Ebro Puleva, S.A. ("Herba"). On August 6, 2003, Herba, the Company's
joint venture partner in Boost, completed the acquisition from Kraft Foods Inc.
of the Reis-Fit(R) brand in Germany and Austria and the Ris-Fix(R) brand in
Denmark. The use by Boost of these brands will make Boost the leader in the
German retail rice market and provide a significant entry into the Danish
branded retail market. The Boost joint ownership agreement provides that each
party has certain rights to buy the other's interest or require the other to buy
its interest. N&C and Herba also each own a one-third interest in Herto N.V., a
major European rice cake manufacturer.

     Financial segment information by geographic area for the most recent three
fiscal years is set forth in Item 8, Note 14, "Segment information."

     The Company is exposed to certain political, economic and other risks
inherent in doing business abroad, including exposure to currency exchange rate
fluctuations, currency exchange restrictions, potentially unfavorable changes in
tax or other laws, partial or total expropriation, and the risks of war,
terrorism and other civil disturbances. Additional information related to this
matter is set forth in Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations". The Company's strategies for
minimizing the effect of currency rate fluctuations are to borrow in local
currencies, denominate accounts receivable in local currencies and hedge certain
short-term foreign product procurement commitments with

                                        2
<PAGE>

specific currency exchange contracts. Currency rate fluctuations have not
materially impacted the historical results of operations. The functional
currencies of the Company's foreign subsidiaries are the local currency of each
subsidiary.

     The Company has a large customer base that includes retail supermarket
chains, wholesalers, industrial ingredient users, restaurant chains, breweries
and other food processors. No customer, domestic or international, accounted for
more than 4% of the Company's consolidated revenues in fiscal 2003.

     In the United States, the Company supports its branded business primarily
with national and regional media advertising and trade and consumer promotions.
These programs are coordinated by the Company's marketing and sales departments
through seven regional managers and a national network of food brokers.

     The Company's sales of retail rice products are executed on a purchase
order basis, although the Company does have some contracts under which it
supplies rice products to industrial, foodservice and international customers.
The Company's sales of retail rice products are conducted through independent
food brokers, who are coordinated by the Company's regional sales managers.
Products are distributed through a nationwide network of Company and public
warehouses.

     The Company buys and mills rough rice from a variety of farm sources,
primarily in Arkansas and Louisiana. No single source accounts for more than 10%
of rough rice purchases. In addition to milling rice in its own facilities, the
Company purchases approximately 31% of its rice requirements from companies
primarily in the United States that mill the rice to the Company's
specifications. In fiscal 2003, 81% of the Company's milled rice purchases were
from one supplier, Riceland Foods, Inc. ("Riceland"), an unrelated third party.
In addition to these rice purchases, the Company is a joint venture partner with
Riceland in rice flour processing and co-generation of power from the
gasification of rice hulls. See Item 8, Note 1, "Organization and nature of
business". The Company believes adequate alternative sources of supply are
readily available, and all purchase transactions are compared to published
market price data and competitive quotes from more than one supplier before
entering into a purchase contract.

     The Company's competitive position depends largely on continued consumer
brand loyalty and its ability to introduce and gain customer acceptance for new
products. The Company competes with three industry leaders and with several
regional competitors on the basis of price, quality, brand name recognition,
availability of products and product innovation.

     The Company is the industry leader in sales of branded rice measured by
volume. The Quaker Oats Company is the largest seller of branded rice in the
industry measured in dollars with its rice brands, Rice-A-Roni and Near East.
Mars, Incorporated, through its subsidiary, Uncle Ben's, Inc., is the largest
seller of parboiled rice. Kraft Foods Inc. produces the leading brand of instant
rice, Minute.

     The Company's Central American subsidiaries have local competitors, some of
which are affiliated with multinational companies. New competition has come from
an influx of international brands imported from the United States, Mexico and
South America attributable largely to declining import duties in Central
America.

     In Belgium and Germany, Boost competes with branded products from
Masterfoods (a division of Mars, Incorporated) as well as branded and private
label products packaged by other European millers and processors. In the United
Kingdom, S&B competes with European rice millers, including mills in the United
Kingdom, from which it also purchases rice, for its share of the rice market. In
the market for products other than rice, S&B competes with local producers and
importers representing worldwide manufacturing operations that process fruits,
vegetables and other food products.

     Although the Company is not involved in rice farming, certain government
regulations affecting United States rice farmers have an impact on the Company's
cost of raw materials. Substantially all rice grown in the United States is
impacted by government programs.

     In May 2002, the Farm Security and Rural Investment Act of 2002 (the "2002
Farm Bill") was enacted to replace the Federal Agriculture Improvement and
Reform Act of 1996. The 2002 Farm Bill provides for the continuation of direct
decoupled payments for the 2002 through 2007 crop years. The payment base
remains at 85 percent of contract acreage, and the direct decoupled payment for
rice is set at $2.35 per cwt. Producers
                                        3
<PAGE>

may elect to update base acres and yields. The 2002 Farm Bill maintains the
marketing loan and loan deficiency structure with the use of generic
certificates, contains a new counter-cyclical program, and maintains planting
flexibility, enabling farmers to plant different crops other than rice as market
conditions warrant. The 2002 Farm Bill sets payment limitations at $40,000 for
direct decoupled payments, $65,000 for counter-cyclical payments, and $75,000
for marketing loan gains. Current provisions regarding husband and wife and the
three entity rule are retained and a new means test provision will become
effective for the 2003 crop. The new farm bill currently complies with the World
Trade Organization commitments, but gives the Secretary of Agriculture the
authority to scale back payments if the United States gets close to the $19.1
billion cap for trade-distorting payments.

     The Company is subject to various federal, state and local environmental
laws and regulations concerning air quality, water quality, and the generation,
use and disposal of materials relating to plant operations and to the processing
of rice. The Company procures and maintains the necessary environmental permits
and licenses in order to operate its facilities and considers itself to be in
compliance in all material respects with those environmental laws and
regulations currently applicable to its business and operations. Such compliance
has not materially affected the Company's business, financial condition or
results of operations.

     The manufacture and marketing of the Company's products are subject to
regulation in the United States by federal regulatory agencies including the
Environmental Protection Agency, the Occupational Safety and Health
Administration, the Food and Drug Administration ("FDA"), and by various state
and local authorities. The FDA also regulates the labeling of the Company's
products. The Company's operations outside the United States are subject to
similar regulation in a number of countries. Compliance with existing
requirements of such governmental bodies has not materially affected the
Company's capital expenditures, earnings or competitive position.

     The Company's brands are protected by numerous trademark registrations in
the United States and foreign jurisdictions. The Company believes that its
registered trademarks have significant value, and are adequate to protect the
brand names significant to its business.

     As of August 15, 2003, the Company employed approximately 2,752 employees,
23% of whom were covered by collective bargaining agreements. In Houston, Texas,
the Company is a party to collective bargaining agreements with General Drivers,
Warehousemen and Helpers Teamsters Local Union No. 968, covering 281 employees.
In Memphis, Tennessee, the Company is a party to a collective bargaining
agreement with Teamsters Local Union No. 1196 covering 109 employees. In
Guatemala, Kern is a party to a collective bargaining agreement with a local
union covering 249 employees. The Company believes its labor relations are good.

ITEM 2.  PROPERTIES

     The following table lists the Company's principal properties, all of which
are owned unless otherwise indicated.

<Table>
<Caption>
LOCATION                                           NATURE OF FACILITY                   SQUARE FOOTAGE
--------                           --------------------------------------------------   --------------
<S>                                <C>                                                  <C>
Houston, Texas...................  Processing, packaging, technical center, warehouse      170,600
Houston, Texas(1)................  Corporate headquarters                                   52,100
Abbeville, Louisiana.............  Processing, packaging, warehouse                        137,200
Memphis, Tennessee...............  Packaging, warehouse                                     99,700
Carlisle, Arkansas...............  Processing                                               94,880
Jonesboro, Arkansas(1)...........  Operations, gasification, storage for rice hulls          6,000
Stuttgart, Arkansas(1)...........  Operations, gasification, storage for rice hulls         36,705
Brinkley, Arkansas...............  Processing, packaging, warehouse                         40,300
Mobile, Alabama(1)...............  Processing, packaging, warehouse                         43,029
Edison, New Jersey(1)............  Warehouse                                                99,902
Clearbrook, Minnesota............  Processing, packaging, warehouse                         27,440
</Table>

                                        4
<PAGE>

<Table>
<Caption>
LOCATION                                           NATURE OF FACILITY                   SQUARE FOOTAGE
--------                           --------------------------------------------------   --------------
<S>                                <C>                                                  <C>
Orpington, England(1)............  Trading office                                           11,100
Bristol, England(2)..............  Distribution                                            210,000
San Jose, Costa Rica.............  Production, packaging, warehouse                        257,000
Guatemala City, Guatemala........  Production, packaging, warehouse                        267,000
San Salvador, El Salvador(1).....  Distribution, warehouse                                  28,000
Managua, Nicaragua(1)............  Distribution, warehouse                                  24,000
Panama City, Panama(1)...........  Distribution, warehouse                                  13,400
</Table>

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

(1) Leased facility.

(2) Contracted space and services.

     In addition to the properties listed in the table, the Company owns seven
drying and storage facilities strategically located in the rice growing region
of the southeastern United States, and leases warehouse facilities in Houston
and Memphis.

ITEM 3.  LEGAL PROCEEDINGS

     The Company is from time to time subject to claims and suits arising in the
ordinary course of business. The Company is not currently a party to any
proceeding which, in management's opinion, would have a material adverse effect
on the Company's financial position or results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     During the fourth quarter of the fiscal year ended June 29, 2003, no matter
was submitted to a vote of the stockholders.

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Information relating to the Company's common stock is set forth in Item 8,
Note 11, "Capital stock", and Note 15, "Unaudited quarterly financial data."

     On August 19, 2003, the Board of Directors declared a quarterly cash
dividend of $0.25 per common share payable October 7, 2003 to stockholders of
record on September 9, 2003.

     The Company has a continuing stock repurchase program. The program
authorizes the repurchase of up to 3,000,000 shares of the Company's common
stock from time to time. As of August 29, 2003 the Company had repurchased
2,023,246 shares. The Company expects to finance any future repurchases from
working capital, unused short-term credit lines and cash flow from operations.

ITEM 6.  SELECTED FINANCIAL DATA

     The following table represents selected consolidated financial data for the
Company and its subsidiaries for each of the five fiscal years 1999 through
2003. Net sales for fiscal years 1999 and 2000 have been restated

                                        5
<PAGE>

to reflect the adoption as of July 1, 2001, of the Financial Accounting
Standards Board's Emerging Issues Task Force (EITF) Issue Nos. 00-14 and 00-25.
All amounts are in thousands except per share data.

<Table>
<Caption>
                                            2003       2002       2001       2000       1999
                                          --------   --------   --------   --------   --------
<S>                                       <C>        <C>        <C>        <C>        <C>
INCOME STATEMENT DATA:
  Net sales.............................  $396,307   $375,064   $381,999   $402,965   $434,291
  Net income............................    28,656     25,245     19,242     25,101     24,255
  Earnings per share:
     Basic..............................      2.01       1.79       1.37       1.74       1.62
     Diluted............................      1.96       1.77       1.36       1.73       1.60
BALANCE SHEET DATA (AT END OF YEAR):
  Total assets..........................  $273,950   $222,714   $208,293   $209,115   $200,204
  Short-term debt and Current maturities
     of long-term debt..................    22,694        859      4,816      5,900      1,973
  Long-term debt, net of current
     maturities.........................     1,553      1,537      1,462      1,462      1,390
  Total debt............................    24,247      2,396      6,278      7,362      3,363
  Stockholders' equity..................   181,050    159,030    140,834    134,931    130,377
  Dividends paid per share..............      0.67       0.65       0.60       0.53       0.47
</Table>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     The following discussion and analysis should be read in conjunction with
the Company's consolidated financial statements and the related notes.

BUSINESS ACQUISITION

     Effective February 10, 2003, the Company purchased all of the Rice
Specialties business of ACH Food Companies, Inc. (ACH) for about $25.4 million.
The business located in Brinkley, Arkansas, and Mobile, Alabama, manufactures
and sells a variety of rice products including quick cooking rice for the U.S.
food manufacturing, retail and foodservice industry. The results of operations
are included in the Company's financial statements beginning February 10, 2003.
See Item 8, Note 13, "Business acquisition."

RESOLUTION OF TAX MATTER

     The results of operations for the year ended June 29, 2003 included $1.4
million, or $0.10 per diluted share, net of minority interest of $0.1 million,
reduction in tax expense due to the favorable resolution of a foreign tax matter
in the second quarter of fiscal 2003. For the year ended June 30, 2002, the
results of operations included $0.8 million, or $0.06 per diluted share, net of
minority interest of $0.1 million, reduction in tax expense due to the favorable
resolution of a foreign tax matter in the second fiscal quarter of fiscal 2002.
The current year reduction in tax involved investment tax credits related to the
capital investments made by the Company in fiscal 1998 and the prior year
reduction was related similarly to capital investments made by the Company in
fiscal 1997. The Company did not record the benefit attributable to these
credits while their availability was uncertain; however, the matter has now been
resolved in favor of the Company.

GENERAL

     The Company operates on a 52/53-week fiscal year ending on the Sunday
closest to June 30th. This period is utilized because it closely coincides with
the rice crop year in the southern United States and rice is the largest
component of the Company's business. Fiscal 2003, fiscal 2002 and fiscal 2001
covered 52 weeks of operations.

     The Company operates in various foreign countries and is therefore subject
to currency fluctuations. Changes in the value of the United States dollar
against these currencies will affect the Company's results of operations and
financial position. When the United States dollar strengthens compared to other
local
                                        6
<PAGE>

currencies, the operating results of the Company's foreign units translate into
fewer United States dollars, thus decreasing the revenues and expenses of the
Company on a consolidated basis. If the United States dollar weakens against the
other relevant currencies, the opposite occurs. The Company's foreign units
attempt to minimize the effects of currency risk by borrowing externally in the
local currency and by hedging their purchases made in foreign currencies when
that option is available. As a matter of policy, the Company does not engage in
currency speculation. Changes in exchange rates historically have not materially
impacted the Company's net sales, costs or business practices and management
expects this to continue.

     Inflationary conditions in the United States and Europe have been moderate
and have not had a material impact on the Company's results of operations or
financial position for the three fiscal years ended June 29, 2003. Despite
higher inflationary rates in Central America, inflation has not had a material
impact on the results of operations or financial position of the Company's units
located in that region because the Company has generally been able to pass on
cost increases to its customers.

     The Company includes in domestic operations all export sales originating
from the United States and sales in Puerto Rico.

ACCOUNTING POLICIES

     The following accounting policies are integral to understanding the
financial statements contained herein reporting the operating results and
financial position of the Company for the year ended June 29, 2003 with
comparative results for the previous year. For additional accounting policies,
see Item 8, Note 2, "Summary of significant accounting policies."

  ACCOUNTING ESTIMATES AND ASSUMPTIONS

     Certain estimates and assumptions are used in preparing the financial
statements presented herein and affect the reported amounts and disclosures.
Estimates are used when accounting for certain consumer and trade promotions,
depreciation and amortization, employee benefits contingencies and asset
valuation allowances. For example, in determining the expense related to
consumer coupons, the Company estimates the percentage of coupons that will be
redeemed based on historical results for similar items. The Company is also
subject to risks and uncertainties that could cause actual results to be
different from estimated results such as changes in market conditions,
competition, foreign exchange rates, legislation, accounting rules and
litigation. Actual results could differ from those estimates. Those items are
discussed in more detail in the section entitled "Forward-Looking Information
and Factors that May Affect Future Results."

  REVENUE RECOGNITION

     Sales are recognized at the time the risk of ownership passes to the
customer. Generally this occurs when products are shipped to trade customers. On
sales where the risk of ownership transfers upon delivery to the customer, sales
are recorded when delivery occurs.

  SALES INCENTIVES

     Certain sales incentives such as coupons, rebates and free products which
are offered to either the retail trade or the consumer are recorded as a
reduction in sales revenue in accordance with recent accounting pronouncements
at the later of either the date the related revenue is recorded or the date at
which the sales incentive is offered.

  CASH DISCOUNTS

     An estimate of cash discounts offered to customers for early payment of
sales invoices is recorded in the same period the related sales are recorded.

                                        7
<PAGE>

  ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

     In the normal course of business the Company extends credit to its
customers. The Company regularly reviews these accounts and makes a provision
for amounts that may become uncollectible. The Company regularly evaluates
accounts receivable and the allowance for doubtful accounts based on historical
loss experience, specific problem accounts and general economic conditions in
its geographic markets, and adjustments to the allowance are charged or credited
to income. Although the Company believes the allowance is adequate to provide
for potential uncollectible accounts, there is a possibility that actual losses
will differ from the amount estimated.

  CONTINGENCIES

     The Company is subject to certain contingencies including but not limited
to legal issues, and claims covering product liability, environmental, tax and
employment matters. The Company records accruals for such contingencies based on
its assessment of the probability of occurrence and an estimate of the potential
liability. In arriving at the liability to be recorded, it considers past
history, where applicable, and the available facts surrounding each issue.
Reserves are provided if the Company thinks it likely that a taxing authority
may take a sustainable position on a matter contrary to the position taken by
the Company or one of its subsidiaries. See Item 8, Note 10, "Commitments and
contingencies".

FORWARD-LOOKING INFORMATION AND FACTORS THAT MAY AFFECT FUTURE RESULTS

     The Securities and Exchange Commission encourages the disclosure of
forward-looking information in order for investors to better understand the
Company and enable more informed investment decisions. From time-to-time the
Company does make oral and written statements that contain forward-looking
statements. The Company tries to identify such statements with the use of words
such as "estimate", "expect", "project", "intend", "plan", "believe", and other
similar terms.

     Factors that could cause actual results to differ materially are the
following:

     - Changes in business, political and worldwide economic conditions

     - Competitive market activity

     - Change in product mix sold

     - Trade buying patterns

     - Litigation

     - Interest rate and foreign currency exchange rate fluctuations

     - Governmental laws and regulations including tax laws

     - Change in generally accepted accounting policies

     - Acts of God affecting manufacturing and distribution channels

     - Acquisitions, divestitures and restructurings

     The Company cannot guarantee that any forward-looking statement will be
realized, but makes every effort to be prudent in its plans and assumptions.
Should known or unknown risks materialize, or should underlying assumptions be
inaccurate, actual results may vary materially from those estimated or
projected.

     The Company does not undertake to publicly update forward-looking
statements as a result of new information, future events or otherwise.

     This discussion of factors that could affect future results is not meant to
be complete but instead is designed to highlight important factors that may
impact the Company's future results.

                                        8
<PAGE>

RESULTS OF OPERATIONS

FISCAL 2003 COMPARED TO FISCAL 2002

     For the year ended June 29, 2003 sales increased $21.2 million or 5.7% to
$396.3 million from $375.1 million for the previous fiscal year. Higher unit
volumes increased sales by $28.2 million while the combined effect of price and
sales mix decreased sales by $8.0 million. Favorable currency translation
increased sales $1.0 million. In the domestic rice business sales of $247.4
million increased $7.7 million or 3.2% from the prior year sales of $239.7
million. Unit volumes increased 10.2% and added $19.2 million to sales. A
combination of lower prices and sales mix reduced sales by $11.5 million. Total
retail unit volumes increased by 2.8% and non-retail unit volumes, excluding
by-products, increased by 34.8%. In the non-retail sector, foodservice,
industrial specialty and export/commodity volumes increased 35.9%, 32.6% and
41.9%, respectively. The volume increases reported by the industrial specialty
and export/commodity sectors were favorably impacted by the acquisition of the
ACH Food Companies, Inc. rice specialties business. Sales by the Company's
energy co-generation joint venture increased $1.4 million or 30.2% to $6.1
million. This increase was directly related to the increase in natural gas
prices. Sales in Central America increased $4.7 million or 5.6% to $88.5 million
compared to $83.8 million in the prior year. Unit volume sales of fruit nectar
and juice products increased by 10.5%. Unit volume sales of cookie and cracker
products were impacted by increased competitive activity and sales price
increases, and increased 1.4%. In total, the increase in volumes added $5.3
million to sales. Price increases increased sales by $3.1 million and
unfavorable currency translation reduced sales by $3.7 million. In Europe, sales
increased $7.5 million or 16.0% to $54.4 million from $46.9 million in the prior
year. Higher unit volumes increased sales by $3.8 million. A combination of
price and product mix reduced sales by $1.0 million and favorable currency
translation increased sales by $4.7 million.

     Gross profit increased $2.0 million or 1.8% to $109.9 million from $107.9
million a year earlier and decreased as a percentage of sales to 27.7% from
28.8%. In the domestic rice business, gross profit decreased $0.5 million or
0.7% to $75.4 million from $75.9 million in the same period in the prior year
and decreased as a percentage of sales to 30.5% from 31.7%. Gross profit
declined primarily as a result of sales mix reflecting lower sales in the
value-added categories of quick cooking rice and prepared rice mixes. The
domestic energy co-generation operations reported gross profit of $0.2 million
versus a loss of $0.2 million in the prior year. The improvement was related to
higher energy prices. Gross profit in Central America increased $1.3 million to
$28.4 million but decreased slightly as a percentage of sales to 32.1% from
32.3% in the prior year. The increase in gross profit was related to the
increase in sales. In Europe gross profit increased by $0.8 million or 14.6% to
$5.9 million, but decreased as a percentage of sales to 10.9% from 11.0% in the
previous year. The increase in gross profit was due to the increase in sales.

     Advertising, selling and warehousing expenses decreased $2.2 million to
$50.5 million. A decrease of $3.6 million in the domestic rice business was
partially offset by an increase of $0.5 million in Central America and $0.9
million in Europe. The increase reported in Central America was related to
competitive markets and expanded distribution. In Europe, the increase was
related to increased distribution activity and an increase in pension plan
benefit costs. In Europe, in the prior year, the Company had a favorable
adjustment to pension expense which was not repeated in the current year.

     Administrative and general expenses increased by $1.9 million or 9.0% to
$23.6 million from $21.7 million in the prior period. Administrative and general
expenses increased in the domestic rice business, Central America and Europe by
$0.6 million, $0.4 million and $0.5 million, respectively. The increase in
Europe was primarily related to an increase in pension plan expense as noted
above. In the domestic rice business, general and administrative expenses
increased by $0.6 million or 10.1% due to higher legal expenses and normal
inflationary increases. General corporate overhead expenses, reflecting normal
inflationary increases, were higher than the prior year by $0.4 million, or
4.4%.

     Operating income increased $2.2 million, or 6.6%, to $35.8 million from
$33.6 million in the prior year. As a percentage of sales, operating income was
even with the prior year at 9.0%. Operating income in the domestic rice business
increased by $2.5 million, or 7.6%, to $35.2 million. The $3.6 million reduction
in advertising, selling and warehousing expenses more than offset the $0.5
million lower gross profit and
                                        9
<PAGE>

$0.6 million increase in general and administrative expenses. In Central
America, operating income increased $0.4 million or 4.2% to $10.5 million due to
higher gross profit as discussed previously offset partially by increased
advertising, selling and warehousing expenses and higher administrative
expenses. Operating income in Europe decreased $0.6 million to $1.1 million. The
$0.8 million increase in gross profit was offset by higher advertising, selling
and warehousing and administrative expenses. As previously discussed these
expenses were reduced in the prior year by an adjustment to pension expense.

     Other income of $2.6 million increased by $1.2 million from the prior year.
In the current period the Company recorded net interest income of $1.0 million
which was $0.3 million higher than the prior year. Equity in the earnings of
unconsolidated affiliates of $2.8 million was even with the previous year. Other
miscellaneous expenses decreased by $0.8 million to $1.2 million primarily due
to the settlement of a dispute regarding a mineral lease, $0.6 million, and $0.1
million gain from the sale of assets and $0.1 million reduction in the
amortization of intangible assets.

     Income tax expense of $9.3 million decreased $0.3 million from the same
period in the prior year notwithstanding an increase in income before tax. The
effective rate decreased to 24.3% from 27.3% in the same period last year. The
effective tax rate is less than the U.S. statutory rate primarily as a result of
foreign earnings which are subject to tax rates that are lower than the U.S.
statutory rate, the utilization of energy tax credits related to the Company's
co-generation joint venture and the resolution of a foreign tax matter in the
second fiscal quarter which resulted in reducing taxes by $1.5 million.

     Net income for the year ending June 29, 2003 increased 13.5% to $28.7
million from $25.2 million in the prior fiscal year. Diluted earnings per share
were $1.96, up from $1.77 in the prior year.

FISCAL 2002 COMPARED TO FISCAL 2001

     For the fiscal year ended June 30, 2002 sales decreased $6.9 million or
1.8% to $375.1 million from $382.0 million for the previous fiscal year. Higher
unit volumes increased sales $3.6 million while the combined effect of price and
sales mix decreased sales by $6.2 million. Unfavorable currency translation
reduced sales a further $4.3 million. In the domestic rice business sales of
$239.7 million increased $0.5 million or 0.2% from the prior year sales of
$239.2 million. Higher volumes were recorded across all sectors in the domestic
rice business with the exception of the low-margin export/commodity and
by-products sectors. In total, the increased volumes added $4.0 million in
sales. Sales in the domestic rice business were negatively affected $3.5 million
due to a combination of sales mix and pricing reflecting the competitive market
conditions. Total retail unit volumes increased by 1.1% and non-retail unit
volumes declined by 1.9% primarily due to competitive market conditions. Sales
by the Company's energy co-generation joint venture decreased by $1.1 million
due primarily to lower energy prices. Lower gas prices decreased sales $2.1
million and higher volumes increased sales by $1.0 million. Sales in Central
America decreased $0.2 million or 0.2% to $83.8 million compared to $84.0
million in the prior year. Higher volumes were recorded in both fruit nectar and
juice products and cookie and cracker product lines. In total, the increase in
volumes added $2.8 million to sales. Price increases, primarily in cookie and
cracker products increased sales by $1.2 million and unfavorable currency
translation reduced sales by $4.2 million. In Europe, sales declined by $6.1
million or 11.6% to $46.9 million from $53.0 million in the prior year. Lower
unit volumes decreased sales by $4.2 million. A combination of price and product
mix reduced sales by $1.9 million and unfavorable currency translation decreased
sales by $0.1 million.

     Gross profit increased $5.4 million or 5.3% to $107.9 million from $102.5
million a year earlier and increased as a percentage of sales to 28.8% from
26.8%. In the domestic rice business, gross profit increased $5.3 million or
7.6% to $75.8 million from $70.5 million in the same period in the prior year
and increased as a percentage of sales to 31.7% from 29.5%. Gross profit
increased primarily as a result of lower rice and energy costs. The domestic
energy co-generation operations reported a loss at the gross profit level of
$0.2 million versus a profit of $0.5 million in the prior year. The decline in
gross profit resulted from the decline in sales related to lower gas prices.
Gross profit in Central America improved by $1.3 million or 5.1% to $27.1
million and increased as a percentage of sales to 32.3% from 30.7% in the prior
year. The increase in gross profit was due to product mix and lower production
costs. In Europe gross profit decreased by $0.5 million or 10.1% to

                                        10
<PAGE>

$5.2 million, but increased slightly as a percentage of sales to 11.0% from
10.8% in the prior year. The decrease in gross profit was due to lower sales
volumes.

     Advertising, selling and warehousing expenses of $52.7 million were down
$0.9 million from the prior year. A decrease of $1.3 million in the domestic
rice business and $1.0 million in Europe was offset by an increase of $1.4
million in Central America. Expenses in Central America increased due to market
conditions and increased costs of expanding distribution. In the domestic rice
business, these costs were reduced primarily due to a lower spending level in
promotional programs and media advertising. Selling expenses were also reduced
by a lower level of bad debt expense. In Europe, the reduction in these expenses
reflects the lower sales volumes of the restructured operations.

     Administrative and general expenses increased by $0.4 million or 1.6% to
$21.7 million from $21.3 million in the prior period. An increase in general
corporate expense of $0.8 million was offset by a reduction of $0.7 million in
European operations. Administrative expenses were reduced in Europe as a result
of the restructuring undertaken in the third fiscal quarter of the previous
year. The restructuring was initiated to adjust for a reduction in business
resulting from the loss of two product line distributorships. In Central
America, administrative and general expenses increased by $0.2 million. This
increase reflects normal inflationary increases.

     During the third quarter of fiscal 2001, the Company recorded a pre-tax
charge of $1.4 million in continuing operations for restructuring and other
charges related to its European operations in the United Kingdom. The charges
were for activities related to work-force reductions and downsizing operations.
The charges include $0.4 million for redundancy payments for employee
termination benefits, $0.6 million for excess facility costs and $0.4 million
for equipment and other asset write-downs. The $1.4 million liability originally
recorded in accrued expenses has been reduced to $0.4 million as of June 30,
2002. The remaining liability primarily relates to long-term office and
equipment leases.

     Operating income increased $7.4 million or 28.5% to $33.6 million from
$26.2 million in the same period in the prior year. As a percentage of sales,
operating income increased to 9.0% from 6.9% in the prior period. Operating
income in the domestic rice business increased by $6.5 million or 25.3% to $32.7
million. The increase in operating profit resulted primarily from the $5.3
million increase in gross profit and lower advertising, selling and warehousing
expenses of $1.3 million as discussed above and a small increase in general and
administrative expense. In Central America, operating income decreased $0.3
million or 2.7% to $10.0 million. Higher advertising, selling and warehousing
expenses of $1.4 million and a $0.2 million increase in administrative expenses
more than offset the $1.3 million increase in gross profit. Operating income in
Europe increased $2.6 million from the prior year's loss of $0.9 million to $1.7
million. The prior year was negatively impacted by the recording of a $1.4
million restructuring charge in the third fiscal quarter. Net of the
restructuring charge, operating income increased by $1.2 million.
Administrative, selling and warehousing expenses were lower in the current year
by $1.0 million and administrative expenses were lower by $0.7 million as a
result of the restructuring. Combined, these expense reductions more than offset
the $0.5 million reduction in gross profit.

     Other income of $1.4 million decreased by $0.4 million from the prior year.
In fiscal 2002 the Company recorded net interest income of $0.6 million as
compared to net interest expense of $0.1 million in the prior year. The increase
in interest income was primarily related to improved cash flow associated with
the higher level of operating profit. Equity in the earnings of unconsolidated
affiliates of $2.8 million was $0.6 million higher than the same period in the
prior year due to record volumes at the Company's rice flour joint venture
operation and earnings from its affiliate, Boost Nutrition. In the current
period the Company recorded no gain from the sale of marketable securities while
in the prior year $1.4 million was recorded. Other miscellaneous expenses
increased by $0.3 million to $2.0 million.

     Income tax expense of $9.6 million reflected an increase of $1.2 million
from the same period in the prior year due to the increase in income before tax.
The effective rate decreased to 27.3% from 29.9% in the same period last year.
The effective tax rate is less than the U.S. statutory rate primarily as a
result of foreign earnings which are subject to tax rates that are lower than
the U.S. statutory rate, the utilization of energy tax

                                        11
<PAGE>

credits related to the Company's co-generation joint venture and the resolution
of a foreign tax matter in the second fiscal quarter which resulted in reducing
taxes by $0.9 million.

     Net income for fiscal 2002 increased $6.0 million or 31.2% to $25.2 million
from $19.2 million in the prior fiscal year. Diluted earnings per share were
$1.77, up from $1.36 in the prior period.

LIQUIDITY AND CAPITAL RESOURCES

     The financial condition of the Company remained strong during fiscal 2003.
The Company requires liquidity and capital primarily to provide the working
capital and plant and equipment to support its operations and growth. The
Company's primary sources of liquidity are cash provided by operating activities
and external borrowing.

     The Company's total of cash, cash equivalents and marketable securities at
June 29, 2003 totaled $22.8 million and total short-term and long-term debt was
$24.2 million. The ratio of debt to total capitalization (total debt plus
stockholders' equity) increased to 11.8% at the end of fiscal 2003 from 1.5% the
previous year. The increase in short-term debt was related to the purchase of
the Rice Specialties business from ACH Food Companies, Inc. in February 2003.
The current ratio decreased to 1.9 in fiscal 2003 from 2.5 at the end of the
prior year as a result of the increase in short-term debt.

     Consistent with historical results, operations provided a strong, positive
cash flow in fiscal 2003, which resulted in net cash provided by operations of
$24.3 million. This was a decrease of $3.3 million from the preceding year. Net
income increased by $3.4 million or 13.5% to $28.7 million and non-cash
depreciation and amortization charges increased by $1.1 million. Based on the
Consolidated Statements of Cash Flows which eliminate the effect of fluctuations
in foreign currency translation rates, working capital requirements increased
$11.8 million compared to the prior year when working capital requirements
increased by $3.5 million. In fiscal 2003, excluding the effect of exchange rate
changes, inventory increased by $3.8 million whereas in the prior year inventory
increased by $3.2 million. Accounts receivable in the current year increased
$7.1 million while in the prior year accounts receivable decreased $4.1 million.
Accounts payable and accrued liabilities increased by $2.1 million in the
current year compared to a decrease of $3.0 million in the previous year. For
the three year period ended June 29, 2003, net cash provided by operations has
exceeded capital expenditures and dividend requirements by $13.2 million.

     Cash used in investing activities totaled $37.6 million. Purchases of
property, plant and equipment totaled $12.6 million, which was $2.9 million more
than last year. Cash inflows related to amounts due from affiliates was $0.4
million more than the prior year. Proceeds from the sale of property plant and
equipment were $0.2 million more than in the prior year. The Company used $25.4
million to purchase the Rice Specialties business from ACH Food Companies, Inc.

     Cash provided by financing activities totaled $15.3 million for the current
year, while in the prior year $10.7 million was used in financing activities. In
the current period, the Company increased debt by $22.1 million while in the
prior year debt was reduced by $3.7 million. Dividend payments during the
current year were $9.5 million, up $0.4 million from $9.1 million paid last
year. Dividends paid per share of common stock increased 3.1% to $0.67 in fiscal
2003.

     The board of directors of the Company has authorized the open-market
repurchase, from time to time, of up to 3.0 million shares of the Company's
common stock. The repurchased stock will be used for general corporate purposes
including issuance of stock under employee stock option plans. During fiscal
2002 the Company did not repurchase any shares. Through the end of fiscal 2003,
the Company has repurchased a total of 2.0 million shares and 471 thousand
shares have been reissued upon exercise of employee stock options.

     The Company has a $35.0 million domestic, short-term, unsecured revolving
credit facility with one bank. Under the terms of this facility, the Company has
the option of borrowing at the bank's prime rate or at the Libor rate plus
0.625%. At June 29, 2003, the Company had $11.5 million in unused and available
credit net of $22.0 in outstanding loans and $1.5 million in letters of credit
outstanding under this credit facility. This facility will expire in fiscal 2004
and the Company expects to renew the facility for another one-year period.

                                        12
<PAGE>

The agreement contains limited financial covenants and the Company is currently
in compliance with all of these covenants.

     The Company's international operations are financed internally or through
borrowings in local currency without the benefit of parent Company guarantees.
The Company's foreign subsidiaries have a total of $11.0 million in short-term
credit lines from local sources and at June 29, 2003 no amounts are borrowed.

     The Company holds a portfolio of marketable securities with a market value
of $0.2 million at June 29, 2003 which is available to provide additional
liquidity.

     The Company believes that the combination of its working capital, unused
and available short-term credit lines and cash flow from operations will provide
it with sufficient capital resources and liquidity to meet its foreseeable
needs.

CONTRACTUAL OBLIGATIONS

     As of June 29, 2003 contractual obligations arising in the normal course of
business were as follows:

<Table>
<Caption>
                                                                FISCAL YEARS
                                           -------------------------------------------------------
                                  TOTAL     2004      2005      2006     2007    2008   THEREAFTER
                                 -------   -------   -------   ------   ------   ----   ----------
<S>                              <C>       <C>       <C>       <C>      <C>      <C>    <C>
Long Term Debt Obligations.....  $ 2,247   $   694   $   273   $  276   $  260   $248      $496
Operating Lease Obligations....   10,981     3,651     3,103    2,528    1,357    218       124
Purchase Obligations...........   52,428    45,076     7,343        9
                                 -------   -------   -------   ------   ------   ----      ----
                                 $65,656   $49,421   $10,719   $2,813   $1,617   $466      $620
                                 =======   =======   =======   ======   ======   ====      ====
</Table>

OFF BALANCE SHEET ARRANGEMENTS

     As of June 29, 2003, the Company co-guaranteed two loans made to Herto N.V.
by foreign banks. A loan made in 2002 contains terms which provide for a maximum
credit available to Herto N.V. of E 7.5 million ($8.6 million) reducing over the
term with a final maturity in 2008. The Company has provided the bank with an
unconditional guarantee for an amount not to exceed 50% of the maximum credit
facility of E 7.5 million. The Company has an indemnity agreement from one of
the other three shareholders of Herto N.V. that provides the Company would be
reimbursed for 33 1/3% of any payment it was required to make under the terms of
the guarantee. This guarantee was made prior to December 30, 2002, the effective
date of Financial Accounting Standards Board Interpretation ("FIN") No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others." Accordingly, no liability has
been recorded by the Company. A second loan made in May 2003 contains terms
which provide for a maximum credit available to Herto N.V. of E 3.0 million
($3.4 million) with repayment beginning in 2005 and a final maturity in 2007.
The Company has provided the bank with an unconditional guarantee for an amount
not to exceed E 1.0 million ($1.1 million). The Company has calculated the fair
value of the guarantee and determined it to be immaterial.

     Also, the Company and Kennedy Rice Dryers, Inc., a corporation of which Mr.
Elton Kennedy, a director of the Company, is the principal stockholder and a
director and officer, each owns a 50% interest in South LaFourche Farm
Partnership. The Company and Mr. Kennedy are each contingently liable on a $1.9
million promissory note payable by the Partnership. This guarantee was made
prior to December 30, 2002, the effective date of FIN No. 45. Accordingly, no
liability has been recorded by the Company.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The Company utilizes derivative financial instruments as hedges to manage a
portion of its exposure to fluctuations in exchange rates related to inventory
purchases denominated in foreign currencies. These instruments qualify for hedge
accounting treatment and, accordingly, gains and losses on these instruments are
deferred and included in the basis of the inventory hedged. The Company utilizes
forward currency exchange contracts to hedge specific purchase commitments. The
contracts have varying maturities with none exceeding twenty-four months and are
settled at maturity, based on prices agreed to at the inception of the
contracts. At

                                        13
<PAGE>

June 29, 2003, the Company had established bank lines available to purchase
forward currency exchange contracts in the amount of $91.8 million of which $7.5
million was outstanding. Gains and losses deferred in outstanding instruments at
June 29, 2003 were $0.1 million and $0.2 million. As a matter of policy, the
Company does not engage in speculative activity and does not hedge to protect
the translated results of foreign operations or other economic exposures for
which speculative accounting treatment of the hedging instrument would be
required.

     The Company from time to time utilizes rough rice futures contracts to
hedge specific purchase commitments. The contracts have varying maturities with
none exceeding twelve months and are settled at maturity, based on prices agreed
to at the inception of the contracts. At June 29, 2003, the Company had no
outstanding futures contracts.

FOREIGN EXCHANGE RISK

     A material amount of the Company's total sales and earnings are exposed to
changes in foreign exchange rates. The Company seeks to manage this risk in part
through operational means, including managing local currency revenues in
relation to local currency costs and local currency assets in relation to local
currency liabilities. The Company does not engage in any type of forward foreign
currency speculation to hedge its investment in foreign subsidiaries and
affiliates.

     Forward foreign currency contracts are utilized by our European operations
to cover specific inventory purchases that are denominated in a foreign
currency. See discussion in "Quantitative and Qualitative Disclosure About
Market Risk" above.

INTEREST RATE RISK

     The Company's U.S. dollar interest-bearing investments and loans are
subject to interest rate risk. The Company invests and borrows primarily on a
short-term or variable-rate basis and does not employ any techniques to hedge
this risk. At June 29, 2003, the Company had outstanding $22.0 million in short
term debt borrowed for 90 days at a 1.9% rate of interest. The Company expects
to be able to renew this debt at the end of the 90 day term. However, upon
renewal of the debt, the Company is subject to changes in interest rates. An
increase in the interest rate of 1/2 of 1% would increase annual interest
expense by $0.1 million before taxes.

     The Company's foreign subsidiaries and affiliates invest and borrow in
their functional currency on both a short-term and long-term basis and are
subject to interest rate risk on these assets and liabilities. The Company does
not employ any techniques to hedge this risk.

LEGAL MATTERS

     Various actions and claims, which arose in the ordinary course of business,
are pending against the Company. In the opinion of management, the ultimate
liability, if any, which may result from these actions and claims will not
materially affect the financial position or future results of operations of the
Company.

RISK RELATING TO ARTHUR ANDERSEN LLP'S LACK OF CONSENT

     REPRESENTATIVES OF ARTHUR ANDERSEN LLP ARE NOT AVAILABLE TO CONSENT TO THE
INCLUSION OF THEIR REPORT ON THE FINANCIAL STATEMENTS OF RIVIANA FOODS INC. IN
THIS ANNUAL REPORT, AND THE READER WILL NOT BE ABLE TO RECOVER AGAINST ARTHUR
ANDERSEN LLP UNDER SECTION 11 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                        14
<PAGE>

     Arthur Andersen LLP were previously the independent accountants for Riviana
Foods Inc. until May 24, 2002. Representatives of Arthur Andersen LLP are not
available to provide the consent required for the inclusion of their report on
the financial statements of Riviana Foods Inc. incorporated in this annual
report, and we have dispensed with the requirement to file their consent in
reliance upon rule 437a of the Securities Act of 1933, as amended. Because
Arthur Andersen LLP have not consented to the inclusion of their report in this
annual report, the reader will not be able to recover against Arthur Andersen
LLP under Section 11 of the Securities Act of 1933, as amended for any untrue
statements of a material fact contained in the financial statements audited by
Arthur Andersen LLP that are incorporated by reference or any omissions to state
a material fact required to be stated therein.

                                        15
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<Table>
<Caption>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Consolidated Financial Statements:
  Independent Auditors' Report..............................   17
  Report of Independent Public Accountants..................   18
  Consolidated Balance Sheets as of June 29, 2003 and June
     30, 2002...............................................   19
  Consolidated Statements of Income for the fiscal years
     ended June 29, 2003, June 30, 2002 and July 1, 2001....   20
  Consolidated Statements of Capital Accounts and Retained
     Earnings for the fiscal years ended June 29, 2003, June
     30, 2002 and July 1, 2001..............................   21
  Consolidated Statements of Comprehensive Income and
     Accumulated Other Comprehensive Loss for the fiscal
     years ended June 29, 2003, June 30, 2002 and July 1,
     2001...................................................   21
  Consolidated Statements of Cash Flows for the fiscal years
     ended June 29, 2003, June 30, 2002 and July 1, 2001....   22
  Notes to Consolidated Financial Statements................   23
</Table>

                                        16
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Shareholders and the Board of Directors
Riviana Foods Inc.:

     We have audited the accompanying consolidated balance sheets of Riviana
Foods Inc. and subsidiaries as of June 29, 2003 and June 30, 2002, and the
related consolidated statements of income, capital accounts and retained
earnings, comprehensive income and accumulated other comprehensive loss and cash
flows for the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Riviana
Foods Inc. and subsidiaries as of June 29, 2003 and June 30, 2002, and the
results of their operations and their cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

                                          KPMG LLP

Houston, Texas
August 14, 2003

                                        17
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Riviana Foods Inc.:

     We have audited the accompanying consolidated balance sheets of Riviana
Foods Inc. (a Delaware corporation) and subsidiaries as of July 1, 2001 and July
2, 2000, and the related consolidated statements of income, capital accounts and
retained earnings, comprehensive income and accumulated other comprehensive
income, and cash flows for each of the three fiscal years in the period ended
July 1, 2001. These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Riviana
Foods Inc. and subsidiaries as of July 1, 2001 and July 2, 2000, and the results
of their operations and their cash flows for each of the three fiscal years in
the period ended July 1, 2001, in conformity with accounting principles
generally accepted in the United States.

                                          ARTHUR ANDERSEN LLP

Houston, Texas
August 13, 2001

     THE REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS SIGNED BY ARTHUR ANDERSEN LLP
AND DATED AUGUST 13, 2001 IS REPRINTED IN ITS ENTIRETY EXACTLY AS IT WAS PRINTED
IN THE COMPANY'S FORM 10-K FOR THE FISCAL YEAR ENDED JULY 1, 2001. THIS REPORT
HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP. THE REPORT REFERS TO CERTAIN
FINANCIAL STATEMENTS AS OF AND FOR THE FISCAL YEARS ENDED JULY 1, 2001, JULY 2,
2000 AND JUNE 27, 1999. THE CONSOLIDATED BALANCE SHEETS OF RIVIANA FOODS INC.
AND SUBSIDIARIES AS OF JULY 1, 2001 AND JULY 2, 2000, AND THE RELATED
CONSOLIDATED STATEMENTS OF INCOME, CAPITAL ACCOUNTS AND RETAINED EARNINGS,
COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME AND CASH FLOWS
FOR THE FISCAL YEARS ENDED JULY 2, 2000 AND JUNE 27, 1999, ARE NOT INCLUDED
HEREIN.

     ARTHUR ANDERSEN LLP WERE PREVIOUSLY THE INDEPENDENT ACCOUNTANTS FOR RIVIANA
FOODS INC. UNTIL MAY 24, 2002. REPRESENTATIVES OF ARTHUR ANDERSEN LLP ARE NOT
AVAILABLE TO PROVIDE THE CONSENT REQUIRED FOR THE INCLUSION OF THEIR REPORT ON
THE FINANCIAL STATEMENTS OF RIVIANA FOODS INC. INCORPORATED IN THIS ANNUAL
REPORT. BECAUSE ARTHUR ANDERSEN LLP HAVE NOT CONSENTED TO THE INCLUSION OF THEIR
REPORT IN THIS ANNUAL REPORT, THE READER WILL NOT BE ABLE TO RECOVER AGAINST
ARTHUR ANDERSEN LLP UNDER SECTION 11 OF THE SECURITIES ACT OF 1933, AS AMENDED,
FOR ANY UNTRUE STATEMENTS OF A MATERIAL FACT CONTAINED IN THE FINANCIAL
STATEMENTS AUDITED BY ARTHUR ANDERSEN LLP OR ANY OMISSIONS TO STATE A MATERIAL
FACT REQUIRED TO BE STATED THEREIN.

                                        18
<PAGE>

                      RIVIANA FOODS INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                              JUNE 29, 2003   JUNE 30, 2002
                                                              -------------   -------------
                                                                  (IN THOUSANDS, EXCEPT
                                                                   PER SHARE AMOUNTS)
<S>                                                           <C>             <C>
                                          ASSETS
CURRENT ASSETS:
  Cash......................................................    $  9,937        $ 11,569
  Cash equivalents..........................................      12,649           9,931
                                                                --------        --------
     Total cash and cash equivalents........................      22,586          21,500
  Marketable securities.....................................         219              65
  Accounts receivable, less allowance for doubtful accounts
     of $1,268 and $1,245...................................      42,900          35,748
  Inventories...............................................      54,800          48,133
  Prepaid expenses..........................................       5,710           3,212
                                                                --------        --------
       Total current assets.................................     126,215         108,658
PROPERTY, PLANT AND EQUIPMENT:
  Land......................................................       3,813           3,576
  Buildings.................................................      39,921          33,831
  Machinery and equipment...................................     137,916         120,790
                                                                --------        --------
     Property, plant and equipment, gross...................     181,650         158,197
  Less accumulated depreciation.............................     (73,626)        (66,051)
                                                                --------        --------
     Property, plant and equipment, net.....................     108,024          92,146
INVESTMENTS IN UNCONSOLIDATED AFFILIATES....................      12,797          11,345
GOODWILL....................................................       9,585
OTHER ASSETS................................................      17,329          10,565
                                                                --------        --------
       Total assets.........................................    $273,950        $222,714
                                                                ========        ========
                           LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Short-term debt...........................................    $ 22,000
  Current maturities of long-term debt......................         694        $    859
  Accounts payable..........................................      21,887          19,598
  Accrued liabilities.......................................      18,567          18,204
  Income taxes payable......................................       3,945           4,582
                                                                --------        --------
       Total current liabilities............................      67,093          43,243
LONG-TERM DEBT, net of current maturities...................       1,553           1,537
DUE TO AFFILIATES...........................................         740             507
DEFERRED INCOME TAXES.......................................      12,512           8,095
OTHER NONCURRENT LIABILITIES................................       4,498           3,814
COMMITMENTS AND CONTINGENCIES...............................
MINORITY INTERESTS..........................................       6,504           6,488
STOCKHOLDERS' EQUITY:
  Preferred stock, $1 par, 5,000 shares authorized, none
     issued.................................................
  Common stock, $1 par, 24,000 shares authorized, 15,883
     issued.................................................      15,883          15,883
  Paid-in capital...........................................       7,339           7,044
  Retained earnings.........................................     203,308         184,997
  Accumulated other comprehensive loss......................     (16,380)        (16,452)
  Treasury stock, at cost, 1,552 and 1,712 shares...........     (29,100)        (32,442)
                                                                --------        --------
       Total stockholders' equity...........................     181,050         159,030
                                                                --------        --------
       Total liabilities and stockholders' equity...........    $273,950        $222,714
                                                                ========        ========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        19
<PAGE>

                      RIVIANA FOODS INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME

<Table>
<Caption>
                                                                       FISCAL YEARS ENDED
                                                          --------------------------------------------
                                                          JUNE 29, 2003   JUNE 30, 2002   JULY 1, 2001
                                                          -------------   -------------   ------------
                                                            (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                       <C>             <C>             <C>
NET SALES...............................................    $396,307        $375,064        $381,999
COST OF SALES...........................................     286,449         267,136         279,491
                                                            --------        --------        --------
  Gross profit..........................................     109,858         107,928         102,508
                                                            --------        --------        --------
COSTS AND EXPENSES:
  Advertising, selling and warehousing..................      50,453          52,671          53,602
  Administrative and general............................      23,602          21,663          21,320
  Restructuring and other charges.......................                                       1,435
                                                            --------        --------        --------
     Total costs and expenses...........................      74,055          74,334          76,357
                                                            --------        --------        --------
     Income from operations.............................      35,803          33,594          26,151
OTHER INCOME (EXPENSE):
  Gain on sale of marketable securities.................                                       1,448
  Interest income.......................................       1,665           1,153           1,273
  Interest expense......................................        (706)           (527)         (1,343)
  Equity in earnings of unconsolidated affiliates.......       2,814           2,798           2,164
  Other (expense), net..................................      (1,169)         (1,983)         (1,744)
                                                            --------        --------        --------
     Total other income.................................       2,604           1,441           1,798
                                                            --------        --------        --------
     Income before income taxes and minority
       interests........................................      38,407          35,035          27,949
INCOME TAX EXPENSE......................................       9,322           9,573           8,352
MINORITY INTERESTS IN EARNINGS OF CONSOLIDATED
  SUBSIDIARIES..........................................         429             217             355
                                                            --------        --------        --------
     NET INCOME.........................................    $ 28,656        $ 25,245        $ 19,242
                                                            ========        ========        ========
     Earnings per share:
       Basic............................................    $   2.01        $   1.79        $   1.37
       Diluted..........................................        1.96            1.77            1.36
     Weighted average common shares outstanding:
       Basic............................................      14,252          14,083          14,072
       Diluted..........................................      14,605          14,266          14,165
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        20
<PAGE>

                      RIVIANA FOODS INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENTS OF CAPITAL ACCOUNTS AND RETAINED EARNINGS

<Table>
<Caption>
                                                     COMMON STOCK                           TREASURY STOCK
                                                   ----------------   PAID-IN   RETAINED   -----------------
                                                   SHARES   AMOUNT    CAPITAL   EARNINGS   SHARES    AMOUNT     TOTAL
                                                   ------   -------   -------   --------   ------   --------   --------
                                                                 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                <C>      <C>       <C>       <C>        <C>      <C>        <C>
BALANCE, July 2, 2000............................  15,883   $15,883   $6,553    $159,620   (1,762)  $(33,911)  $148,145
  Net income.....................................                                 19,242                         19,242
  Sales of common stock..........................                                   (165)      34        600        435
  Dividends declared ($0.62 per share)...........                                 (8,718)                        (8,718)
  Repurchases of common stock....................                                            (114)    (1,986)    (1,986)
  Collection of employee discount on stock.......                         52                                         52
  Tax credit for disqualifying dispositions of
    stock........................................                         36                                         36
                                                   ------   -------   ------    --------   ------   --------   --------
BALANCE, July 1, 2001............................  15,883    15,883    6,641     169,979   (1,842)   (35,297)   157,206
  Net income.....................................                                 25,245                         25,245
  Sales of common stock..........................                                   (997)     130      2,855      1,858
  Dividends declared ($0.655 per share)..........                                 (9,230)                        (9,230)
  Collection of employee discount on stock.......                        231                                        231
  Tax credit for disqualifying dispositions of
    stock........................................                        172                                        172
                                                   ------   -------   ------    --------   ------   --------   --------
BALANCE, June 30, 2002...........................  15,883    15,883    7,044     184,997   (1,712)   (32,442)   175,482
  Net income.....................................                                 28,656                         28,656
  Sales of common stock..........................                                   (718)     161      3,372      2,654
  Dividends declared ($0.675 per share)..........                                 (9,627)                        (9,627)
  Repurchases of common stock....................                                              (1)       (30)       (30)
  Collection of employee discount on stock.......                         95                                         95
  Tax credit for disqualifying dispositions of
    stock........................................                        200                                        200
                                                   ------   -------   ------    --------   ------   --------   --------
BALANCE, June 29, 2003...........................  15,883   $15,883   $7,339    $203,308   (1,552)  $(29,100)  $197,430
                                                   ======   =======   ======    ========   ======   ========   ========
</Table>

              CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND
                      ACCUMULATED OTHER COMPREHENSIVE LOSS

<Table>
<Caption>
                                                               UNREALIZED     CUMULATIVE
                                                                  GAINS         FOREIGN      ACCUMULATED
                                                              ON MARKETABLE    CURRENCY         OTHER
                                                               SECURITIES,    TRANSLATION   COMPREHENSIVE   COMPREHENSIVE
                                                              NET OF TAXES    ADJUSTMENT        LOSS           INCOME
                                                              -------------   -----------   -------------   -------------
                                                                                    (IN THOUSANDS)
<S>                                                           <C>             <C>           <C>             <C>
BALANCE, July 2, 2000.......................................      $ 802        $(14,016)      $(13,214)
  Net income................................................                                                   $19,242
  Marketable securities, net of taxes:
    Realized (gains)........................................       (941)                          (941)           (941)
    Unrealized gains........................................        145                            145             145
  Effect of balance sheet translations......................                     (2,362)        (2,362)         (2,362)
                                                                                                               -------
COMPREHENSIVE INCOME........................................                                                   $16,084
                                                                  -----        --------       --------         =======
BALANCE, July 1, 2001.......................................          6         (16,378)       (16,372)
  Net income................................................                                                   $25,245
  Marketable securities, net of taxes:
    Unrealized (losses).....................................         (4)                            (4)             (4)
  Effect of balance sheet translations......................                        (76)           (76)            (76)
                                                                                                               -------
COMPREHENSIVE INCOME........................................                                                   $25,165
                                                                  -----        --------       --------         =======
Balance, June 30, 2002......................................          2         (16,454)       (16,452)
  Net income................................................                                                   $28,656
  Marketable securities, net of taxes:
    Unrealized gains........................................        100                            100             100
  Effect of balance sheet translations......................                        (28)           (28)            (28)
                                                                                                               -------
COMPREHENSIVE INCOME........................................                                                   $28,728
                                                                  -----        --------       --------         =======
BALANCE, June 29, 2003......................................      $ 102        $(16,482)      $(16,380)
                                                                  =====        ========       ========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        21
<PAGE>

                      RIVIANA FOODS INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                       FISCAL YEARS ENDED
                                                          --------------------------------------------
                                                          JUNE 29, 2003   JUNE 30, 2002   JULY 1, 2001
                                                          -------------   -------------   ------------
                                                                         (IN THOUSANDS)
<S>                                                       <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income............................................    $ 28,656        $ 25,245        $ 19,242
  Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation and amortization......................       8,625           7,529           6,879
     Deferred income taxes..............................       4,553           3,053             710
     Restructuring and other charges....................                                       1,056
     Gain on disposition of assets......................        (135)            (39)         (1,438)
     Equity in earnings of unconsolidated affiliates....      (2,814)         (2,798)         (2,164)
     Change in assets and liabilities:
       Accounts receivable, net.........................      (7,083)          4,121             127
       Inventories......................................      (3,795)         (3,201)          3,364
       Prepaid expenses.................................      (2,445)           (912)             50
       Other assets.....................................      (3,534)         (2,160)          1,005
       Accounts payable and accrued liabilities.........       2,051          (2,981)         (5,950)
       Income taxes payable.............................        (575)           (512)           (454)
       Other noncurrent liabilities.....................         705             522             370
       Minority interests...............................         130            (205)           (132)
                                                            --------        --------        --------
          Net cash provided by operating activities.....      24,339          27,662          22,665
                                                            --------        --------        --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property, plant and equipment............     (12,639)         (9,750)        (11,917)
  Proceeds from disposals of property, plant and
     equipment..........................................         283             123              81
  Investment by joint venture partner...................                                         557
  Proceeds from sale of marketable securities...........                                       1,758
  Increase (decrease) in due to affiliates..............         185            (223)            (13)
  Cash paid for business and certain assets, net of cash
     received...........................................     (25,431)
                                                            --------        --------        --------
          Net cash used in investing activities.........     (37,602)         (9,850)         (9,534)
                                                            --------        --------        --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase (decrease) in short-term debt................      22,000          (4,000)           (995)
  Additions to long-term debt...........................       1,418           2,150           1,950
  Repayments of long-term debt..........................      (1,337)         (1,829)         (1,918)
  Dividends paid........................................      (9,532)         (9,138)         (8,457)
  Repurchases of common stock...........................         (30)                         (1,986)
  Sales of common stock.................................       2,654           1,858             435
  Collection of employee discount on stock..............          95             231              52
                                                            --------        --------        --------
          Net cash provided by (used in) financing
            activities..................................      15,268         (10,728)        (10,919)
                                                            --------        --------        --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
  EQUIVALENTS...........................................        (919)           (574)           (750)
                                                            --------        --------        --------
INCREASE IN CASH AND CASH EQUIVALENTS...................       1,086           6,510           1,462
CASH AND CASH EQUIVALENTS, beginning of period..........      21,500          14,990          13,528
                                                            --------        --------        --------
CASH AND CASH EQUIVALENTS, end of period................    $ 22,586        $ 21,500        $ 14,990
                                                            ========        ========        ========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        22
<PAGE>

                      RIVIANA FOODS INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 JUNE 29, 2003, JUNE 30, 2002 AND JULY 1, 2001

                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(1) ORGANIZATION AND NATURE OF BUSINESS:

     Riviana Foods Inc. (Riviana) and subsidiaries (collectively, Company) are
primarily engaged in the processing, marketing and distributing of rice and
other food products. The Company has rice operations in the United States and in
Belgium and Germany through unconsolidated affiliates, Boost Nutrition C.V.
(Boost) and Herto N.V. (Herto), food operations in Central America through
Alimentos Kern de Guatemala, S.A. (Kern) and Pozuelo, S.A. (Pozuelo) in Costa
Rica, and a food distribution operation in the United Kingdom, Stevens &
Brotherton Ltd. (S&B).

     In the United States, the Company processes, markets and distributes
branded and private-label rice products to the retail grocery trade and
foodservice industry, rice and rice by-products to industrial customers and
branded products to Puerto Rico and international markets. Riviana's primary
domestic brand names are Success(R), Mahatma(R), Carolina(R), River(R),
WaterMaid(R), S&W(R), Gourmet House(R), China Doll(R), Sello Rojo(R) and El
Mago(R).

     In Central America, Kern produces and markets a wide range of processed
fruits and vegetables under the Kern's(R), Ducal(R), Koolfrut(R) and Fun-C(R)
brands. Pozuelo produces and markets cookies and crackers under the Riviana
Pozuelo(R) brand. Both Kern's and Pozuelo's products are sold primarily in
Central America through similar distribution channels with some products under
the Ducal(R) and Riviana Pozuelo(R) brands exported to certain United States
markets.

     In Europe, S&B distributes rice under the Phoenix(R) brand and private
labels as well as dried fruits, processed meats and other food products to
retail, wholesale, foodservice and industrial customers. Through unconsolidated
affiliates Boost and Herto, the Company processes and sells packaged rice
products under the Bosto(R) brand within Belgium, the Oryza(R) brand within
Germany, private-label packaged rice products to major retailers in the European
Union and both bulk and branded rice products to Eastern Europe and other export
markets. The Company owns a 49% interest in Boost and a 33% interest in Herto.

     In addition to the U.S. operations above, the Company is a partner with
Riceland Foods, Inc. (Riceland) in joint ventures in Arkansas in rice flour
processing and co-generation of power from the gasification of rice hulls. The
rice flour processing operation is a 50/50 joint venture with Riceland in which
each partner shares equally in profits and in any future capital contributions.
The venture has no debt. The Company accounts for the joint venture using the
equity method of accounting and its results are included in Note 2, "Summary of
significant accounting policies, Investments in unconsolidated affiliates".

     The Company is a partner with Riceland in two joint ventures to co-generate
power from the gasification of rice hulls. Riceland is the ultimate purchaser of
the energy output from these ventures. The Company's ownership in the two
ventures is 51% and 49% with the remaining equity of 49% and 51% owned by
Riceland. The results of both are included in the consolidated results of the
Company. Notwithstanding the 49% ownership, the Company consolidates the entire
operation at this venture since it controls the operation, and is the 100% owner
of the gasifier assets that are utilized to provide the gasification of rice
hulls that in turn is the heat source for the production of energy. The
consolidated financial statements fully reflect all obligations of both of these
joint ventures.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

  FISCAL REPORTING PERIODS

     The Company operates on a 52/53-week fiscal year ending on the Sunday
closest to June 30. This period is utilized as it is a natural business year
closely coinciding with the rice crop year in the southern United

                                        23
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

States, rice being the largest component of the Company's sales. The fiscal
years ended June 29, 2003, June 30, 2002 and July 1, 2001 were 52-week fiscal
years.

  CONSOLIDATION

     The consolidated financial statements include the accounts of Riviana and
its majority-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.

  INVESTMENTS IN UNCONSOLIDATED AFFILIATES

     The Company has equity investments in certain food processing, marketing
and distribution companies, which are accounted for utilizing the equity method
of accounting. Ownership interests range from 33 to 50 percent in these
unconsolidated affiliates.

     The following represents summarized financial information with respect to
the assets, liabilities and results of operations of the unconsolidated
affiliates.

<Table>
<Caption>
BALANCE SHEET DATA                                            JUNE 29, 2003   JUNE 30, 2002
------------------                                            -------------   -------------
<S>                                                           <C>             <C>
Current assets..............................................     $45,484         $41,641
Noncurrent assets...........................................      35,176          23,984
                                                                 -------         -------
     Total assets...........................................     $80,660         $65,625
                                                                 =======         =======
Current liabilities.........................................     $32,147         $29,293
Noncurrent liabilities......................................      20,804          11,976
Common equity:
  Riviana...................................................      12,797          11,345
  Others....................................................      14,912          13,011
                                                                 -------         -------
     Total liabilities and equity...........................     $80,660         $65,625
                                                                 =======         =======
</Table>

<Table>
<Caption>
INCOME STATEMENT DATA                                    2003       2002       2001
---------------------                                    ----       ----       ----
<S>                                                    <C>        <C>        <C>
Net sales............................................  $151,796   $139,591   $133,835
Gross profit.........................................    27,809     24,728     22,612
Income before income taxes...........................     6,845      7,156      5,545
Net income...........................................     5,888      5,714      4,577
Equity in earnings of unconsolidated affiliates......     2,814      2,798      2,164
</Table>

     Subsequent to June 29, 2003, the Company's unconsolidated affiliate, Boost,
entered into a trademark license agreement and put option contract expiring in
2018 with the Company's joint venture partner, Ebro Puleva (Ebro). Boost
committed to pay Ebro E1,400 ($1,600) annually, adjusted for local inflation,
until 2018 for the right to use the trademark Reis Fit(R) and Ris-Fix(R) in
certain European countries. At any time prior to 2018, Ebro has the right to
require Boost to purchase the trademarks for an amount equal to the gross
remaining payments on the license agreement, adjusted for local inflation.

     The Company guarantees certain notes payable of these unconsolidated
affiliates. See Note 9, "Related party transactions", and Note 10, "Commitments
and contingencies: Loan Guarantees".

  CHANGES IN ACCOUNTING PRINCIPLES

     Effective July 3, 2000, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activities", SFAS No. 137,

                                        24
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

"Accounting for Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of FASB Statement No. 133" and SFAS No. 138, "Accounting for
Certain Derivative Instruments and Certain Hedging Activities". The effect of
adopting these statements had no material impact on the Company's results of
operations or financial position.

     Effective July 1, 2001, the Company adopted the Financial Accounting
Standards Board's Emerging Issues Task Force (EITF) Issue No. 00-14, "Accounting
for Certain Sales Incentives", and EITF Issue No. 00-25, "Vendor Income
Statement Characterization of Consideration paid to a Reseller of the Vendor's
Products". These issues address the recognition, measurement and income
statement classification for various types of sales incentives including
discounts, coupons, rebates, free products and payments to retailers to obtain
shelf space for products of the Company. The effect of these issues
significantly impacted revenue and expense classifications but did not change
reported net income.

     Effective July 1, 2002, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 141, "Business Combinations", and SFAS No. 142,
"Goodwill and Other Intangible Assets". In addition to requiring the use of the
purchase method for all business combinations, SFAS No. 141 requires intangible
assets that meet certain criteria to be recognized as assets apart from
goodwill. SFAS No. 142 addresses accounting and reporting standards for acquired
goodwill and other intangible assets, and generally requires that goodwill and
indefinite life intangible assets no longer be amortized but be tested for
impairment annually. Finite life intangible assets will continue to be amortized
over their useful lives. As of July 1, 2002, the Company completed the required
impairment tests of goodwill and other intangible assets with indefinite lives
and, based on the results of the tests, determined no reserve for impairment to
the carrying values of these assets was needed. In accordance with SFAS No. 142,
prior period amounts were not restated. For the twelve months ended June 30,
2002 and July 1, 2001, amortization net of taxes of indefinite life intangibles
was $97 and $46. Had the prior period been restated, the effect of adopting this
statement would have had no material effect on the Company's results of
operations or financial position. The net carrying value of goodwill and other
indefinite life intangibles as of June 29, 2003 was $9,585 and $1,694.

     Effective July 1, 2002, the Company adopted SFAS No. 143, "Accounting for
Asset Retirement Obligations". SFAS No. 143 addresses accounting and reporting
for legal obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The effect of adopting this
statement had no material impact on the Company's results of operations or
financial position.

     Effective July 1, 2002, the Company adopted SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets". This pronouncement establishes
the methods of accounting for the impairment or disposal of long-lived assets by
sale or otherwise. The effect of adopting this statement had no material impact
on the Company's results of operations or financial position.

     Effective December 30, 2002, the Company adopted SFAS No. 146, "Accounting
for Costs Associated with Exit or Disposal Activities." This statement broadens
the presentation of discontinued operations to include more disposal
transactions and restructurings planned and controlled by management that
materially change the scope of the business or the manner in which that business
is conducted. This statement is effective for business exit or disposal
activities initiated after December 31, 2002. The effect of adopting this
statement had no material impact on the Company's results of operations or
financial position.

     Effective December 30, 2002, the Company adopted Financial Accounting
Standards Board Interpretation (FIN) No. 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others." This interpretation significantly changes the previous
practice in the accounting for, and disclosure of, guarantees. Guarantees
meeting the characteristics described in the interpretation are required to be
initially recorded at fair value, which is different from general current
practice of recognition of a liability only when loss is probable and reasonably
estimable, as prescribed in SFAS No. 5, "Accounting for Contingencies." The
interpretation also requires a guarantor to make significant new

                                        25
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

disclosures for virtually all guarantees even if the likelihood of the
guarantor's having to make payments under the guarantee is remote. The
disclosure requirements are effective for financial statements of interim or
annual periods ending after December 15, 2002. The initial recognition and
measurement provisions are applicable on a prospective basis to guarantees
issued or modified after December 31, 2002. The effect of adopting this
interpretation did not have a material impact on the Company's results of
operations or financial position. See Note 10, "Commitments and contingencies:
Loan Guarantees".

     Effective December 30, 2002, the Company adopted SFAS No. 148, "Accounting
for Stock-Based Compensation -- Transition and Disclosure". This statement
amends SFAS No. 123, "Accounting for Stock-Based Compensation", to provide
alternative methods of transition to Statement 123's fair value method of
accounting for stock-based compensation. The Company has elected to continue to
follow the intrinsic value method in accounting for its employee stock options
in accordance with APB 25, "Accounting for Stock Issued to Employees".
Accordingly, because the exercise price of the Company's employee stock options
equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized. The effect of adopting this statement did
not have a material impact on the Company's results of operations or financial
position. See Note 12, "Stock option plans".

     Effective December 30, 2002, the Company adopted EITF Issue No. 02-16,
"Accounting by a Customer (Including a Reseller) for Certain Consideration
Received from a Vendor". This issue addresses the accounting for cash
consideration given to a reseller of a vendor's products from a vendor. This
issue indicates that cash consideration received by a customer from a vendor is
presumed to be a reduction in the price of the vendor's products or services and
should, therefore, be characterized as a reduction of cost of sales when
recognized in the customer's income statement. The EITF indicated that such
presumption is overcome when the consideration is either (a) a reimbursement of
costs incurred by the customer to sell the vendor's products, in which case the
cash consideration should be characterized as a reduction of that cost when
recognized in the customer's income statement, or (b) a payment for assets or
services delivered to the vendor, in which case the cash consideration should be
characterized as revenue when recognized in the customer's income statement. The
EITF also reached a consensus that a rebate or refund of a specified amount of
cash consideration that is payable only if the customer completed a specified
cumulative level of purchases or remains a customer for a specified time period
should be recognized as a reduction of the cost of sales based on a systematic
and rational allocation of the cash consideration offered to each of the
underlying transactions that results in progress by the customer toward earning
the rebate or refund, provided the amounts are reasonably estimable. The effect
of adopting this issue did not have a material impact on the Company's results
of operations or financial position.

     Effective February 1, 2003, the Company adopted FIN No. 46, "Consolidation
of Variable Interest Entities -- an Interpretation of ARB No. 51." This
interpretation addresses consolidation by business enterprises of entities in
which equity investors do not have the characteristics of a controlling
financial interest or do not have sufficient equity at risk for the entity to
finance its activities without additional subordinated financial support from
other parties. Variable interest entities are required to be consolidated by
their primary beneficiaries if they do not effectively disperse risks among
parties involved. The primary beneficiary of a variable interest entity is the
party that absorbs a majority of the entity's expected losses or receives a
majority of its expected residual returns. The consolidation requirements of
this interpretation apply immediately to variable interest entities created
after January 31, 2003 and apply to existing entities in the first fiscal year
or interim period beginning after June 15, 2003. Certain new disclosure
requirements apply to all financial statements issued after January 31, 2003.
The adoption of this interpretation did not have a material impact on the
Company's results of operations or financial position.

     Effective June 1, 2003, the Company adopted SFAS No. 150, "Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity." This Statement establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both liabilities
and

                                        26
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

equity. SFAS No. 150 requires certain financial instruments that embody
obligations of the issuer and have characteristics of both liabilities and
equity to be classified as liabilities. Many of these instruments previously
were classified as equity or temporary equity and as such, SFAS No. 150
represents a significant change in practice in the accounting for a number of
mandatorily redeemable equity instruments and certain equity derivatives that
frequently are used in connection with share repurchase programs. SFAS No. 150
is effective for all financial instruments created or modified after May 31,
2003, and to other instruments at the beginning of the first interim period
beginning after June 15, 2003. The effect of adopting this statement did not
have a material impact on the Company's results of operations or financial
position.

  ACCOUNTING ESTIMATES AND ASSUMPTIONS

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent gains and losses at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

  CASH AND CASH EQUIVALENTS

     For purposes of the consolidated balance sheets and the consolidated
statements of cash flows, the Company considers all investments with original
maturities of three months or less to be cash equivalents.

  ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

     In the normal course of business, the Company extends credit to its
customers. The Company regularly reviews the accounts and makes adequate
provision for any potentially uncollectible balances. Management believes that
the Company has no significant concentrations of credit risk.

  INVENTORIES

     Inventories are valued at the lower of cost or market. Cost is determined
on the first-in, first-out (FIFO) method. Inventories were composed of the
following:

<Table>
<Caption>
                                                              JUNE 29, 2003   JUNE 30, 2002
                                                              -------------   -------------
<S>                                                           <C>             <C>
Raw materials...............................................     $ 9,098         $ 8,301
Work in Process.............................................          64              75
Finished goods..............................................      37,933          33,600
Packaging supplies..........................................       7,705           6,157
                                                                 -------         -------
  Total.....................................................     $54,800         $48,133
                                                                 =======         =======
</Table>

  PROPERTY, PLANT AND EQUIPMENT

     Land, buildings, machinery and equipment are stated at cost. Depreciation
is provided for financial reporting purposes on the straight-line basis over the
following estimated useful lives:

<Table>
<S>                                                           <C>
Buildings...................................................  30 to 40 years
Machinery and equipment.....................................   3 to 29 years
</Table>

     Maintenance, repairs and minor replacements are charged against income as
incurred; major replacements and betterments are capitalized. The cost of assets
sold or retired and the related accumulated depreciation is removed from the
accounts at the time of disposition, and any resulting gain or loss is reflected
as other income or expense for the period.
                                        27
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  GOODWILL AND OTHER INTANGIBLES

     As described above, the Company adopted SFAS No. 142 on July 1, 2002. In
accordance with SFAS No. 142, goodwill and indefinite life intangible assets are
no longer amortized but subject to annual impairment tests. The required
impairment tests were performed and did not result in an impairment charge.
Prior to 2003, these assets were amortized on the straight-line method. Other
intangible assets with finite lives, such as non-compete agreements, continue to
be amortized over their useful lives, ranging from 3 to 5 years.

  OTHER NONCURRENT LIABILITIES

     Other noncurrent liabilities are composed primarily of certain
postretirement benefits and staff termination indemnities.

  REVENUE RECOGNITION

     Sales are recognized at the time risk of ownership passes to the customer.
Generally this occurs when products are shipped to customers. On sales where
risk of ownership transfers upon delivery to customers, sales are recorded when
delivery occurs.

  SALES INCENTIVES

     Certain sales incentives such as coupons, rebates and free products which
are offered to either the retail trade or the consumer are recorded as a
reduction in sales revenue in accordance with recent accounting pronouncements
at the later of either the date the related revenue is recorded or the date at
which the sales incentive is offered.

  CASH DISCOUNTS

     An estimate of cash discounts offered to customers for early payment of
sales invoices is recorded in the same period the related sales are recorded.

  ADVERTISING

     The costs of advertising, promotion and marketing programs are charged to
operations in the period incurred.

  EARNINGS PER SHARE

     Basic and diluted earnings per share are computed by dividing net income by
the respective number of weighted average common shares outstanding. The
reconciliation of weighted average common shares outstanding used in computing
basic and diluted earnings per share is as follows:

<Table>
<Caption>
                                                              2003     2002     2001
                                                             ------   ------   ------
<S>                                                          <C>      <C>      <C>
Basic......................................................  14,252   14,083   14,072
Effect of dilutive stock options...........................     353      183       93
                                                             ------   ------   ------
Diluted....................................................  14,605   14,266   14,165
                                                             ======   ======   ======
</Table>

     In the calculation of the effect of dilutive stock options, 1, 418 and 463
anti-dilutive stock option shares have been excluded for 2003, 2002 and 2001.

                                        28
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  STOCK-BASED COMPENSATION

     Stock-based compensation plans, are accounted for under the provisions of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations using the intrinsic value method.
Accordingly, no expense has been recognized for stock option grants. Had expense
been determined based on the Black-Scholes option pricing model at the grant
date for awards in 2003, 2002 and 2001 consistent with the provisions of SFAS
No. 123, "Accounting for Stock-Based Compensation", the Company's net income and
earnings per share would have been as follows:

<Table>
<Caption>
                                                           2003      2002      2001
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Net income:
  As reported...........................................  $28,656   $25,245   $19,242
  Proforma stock-based compensation expense, net of
     tax................................................    1,078       920       901
                                                          -------   -------   -------
  Pro forma.............................................  $27,578   $24,325   $18,341
                                                          =======   =======   =======
Earnings per share -- basic:
  As reported...........................................  $  2.01   $  1.79   $  1.37
  Proforma stock-based compensation expense, net of
     tax................................................     0.07      0.06      0.07
                                                          -------   -------   -------
  Pro forma.............................................  $  1.94   $  1.73   $  1.30
                                                          =======   =======   =======
Earnings per share -- diluted:
  As reported...........................................  $  1.96   $  1.77   $  1.36
  Proforma stock-based compensation expense, net of
     tax................................................     0.06      0.06      0.06
                                                          -------   -------   -------
  Pro forma.............................................  $  1.90   $  1.71   $  1.30
                                                          =======   =======   =======
</Table>

The SFAS No. 123 method of accounting has not been applied to options granted
prior to July 3, 1995 and the resulting pro forma compensation expense may not
be indicative of pro forma expense in future years.

     The Black-Scholes option pricing model was used to value the grants issued
in 2003, 2002 and 2001. The weighted average value and the assumptions used were
as follows:

<Table>
<Caption>
                                                              2003    2002    2001
                                                              -----   -----   -----
<S>                                                           <C>     <C>     <C>
Weighted average value per share............................  $8.00   $4.78   $5.55
Option term until exercised (years).........................      7       7       7
Risk-free interest rate.....................................    4.3%    5.1%    6.0%
Expected dividend yield.....................................    2.7%    4.9%    3.8%
Volatility..................................................   0.35    0.36    0.37
</Table>

  TRANSLATION OF FOREIGN CURRENCIES

     The assets and liabilities of consolidated foreign subsidiaries are
translated into United States dollars at exchange rates in effect at the date of
the financial statements. Revenues and expenses are translated at the average
rates during the reporting periods. Resulting translation gains and losses are
accumulated as a separate component of accumulated other comprehensive loss in
stockholders' equity. Because the Company follows the policy of not providing
taxes on unremitted foreign earnings as discussed in Note 7, "Income taxes",
such translation gains and losses are not tax effected.

                                        29
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The Company's financial instruments other than derivative financial
instruments consist primarily of cash, cash equivalents, trade receivables,
trade payables and debt instruments. The Company periodically reviews these
instruments for impairment of value and records a provision for any impairment
identified. The book values of these instruments are considered to be
representative of their respective fair values.

  DERIVATIVE FINANCIAL INSTRUMENTS

     The Company utilizes derivative financial instruments as hedges to manage a
portion of its exposure to fluctuations in exchange rates related to inventory
purchases denominated in foreign currencies. These instruments qualify for hedge
accounting treatment and, accordingly, gains and losses on these instruments are
deferred and included in the basis of the inventory hedged. The Company utilizes
forward currency exchange contracts to hedge specific purchase commitments. The
contracts have varying maturities with none exceeding 24 months and are settled
at maturity, based on rates agreed to at the inception of the contracts. At June
29, 2003, the Company had established bank lines available to purchase forward
exchange contracts in the amount of $91,843, of which $7,491 was outstanding.
Gains and losses deferred in outstanding instruments at June 29, 2003 were $94
and $180.

     The Company from time to time utilizes rough rice futures contracts to
hedge specific purchase commitments. The contracts have varying maturities with
none exceeding twelve months and are settled at maturity, based on prices agreed
to at the inception of the contracts. At June 29, 2003, the Company had no
outstanding rough rice futures contracts.

     As a matter of policy, the Company does not engage in speculative activity
and does not hedge to protect the translated results of foreign operations or
other economic exposures for which speculative accounting treatment of the
hedging instrument would be required.

  RECLASSIFICATION

     Certain prior-year balances have been reclassified to conform to the
current-year presentation.

(3) RESTRUCTURING AND OTHER CHARGES:

     During the third quarter of 2001, the Company recorded restructuring and
other charges at Stevens & Brotherton, the Company's United Kingdom subsidiary.
The charges consisted of redundancy payments ($388) for employee termination
benefits for 16 employees, excess facility costs ($553) and equipment and other
asset write-downs ($494). The $1,435 liability originally recorded in accrued
liabilities has been reduced to $319 at June 29, 2003. The remaining liability
primarily relates to long-term office and equipment leases.

(4) MARKETABLE SECURITIES:

     Investments in debt and equity securities are recorded as required by SFAS
No. 115, "Accounting for Certain Investments in Debt and Equity Securities". The
Company's marketable securities consist of high-grade equity securities that are
all considered available for sale. Available-for-sale securities, securities
that the Company purchased without any specific intent to sell in the near term,
are carried at fair value with unrealized gains and losses included directly in
stockholders' equity, net of applicable deferred income taxes. The basis upon
which costs were determined in computing realized gains and losses was specific
identification.

                                        30
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                              JUNE 29,   JUNE 30,
                                                                2003       2002
                                                              --------   --------
<S>                                                           <C>        <C>
Aggregate fair value........................................    $219       $65
Cost basis..................................................      62        62
                                                                ----       ---
  Unrealized net gain before taxes..........................     157         3
Income taxes................................................      55         1
                                                                ----       ---
Unrealized gain, net of taxes...............................    $102       $ 2
                                                                ====       ===
Unrealized gains............................................    $166       $12
Unrealized losses...........................................      (9)       (9)
                                                                ----       ---
  Unrealized net gain before taxes..........................    $157       $ 3
                                                                ====       ===
</Table>

<Table>
<Caption>
                                                              2003   2002    2001
                                                              ----   ----   ------
<S>                                                           <C>    <C>    <C>
Proceeds from sales of marketable securities................  None   None   $1,758
Realized gross gains........................................                 1,448
Realized gross losses.......................................
</Table>

(5) ACCRUED LIABILITIES:

     Accrued liabilities consisted of the following:

<Table>
<Caption>
                                                              JUNE 29,   JUNE 30,
                                                                2003       2002
                                                              --------   --------
<S>                                                           <C>        <C>
Payroll, commissions and bonuses............................  $ 8,229    $ 7,365
Coupon redemption and advertising...........................    4,028      4,181
Taxes, other than income taxes..............................    1,354      1,145
Manufacturing costs.........................................    2,142      2,474
Other.......................................................    2,814      3,039
                                                              -------    -------
  Total.....................................................  $18,567    $18,204
                                                              =======    =======
</Table>

(6) BORROWING ARRANGEMENTS:

     Interest rates related to short-term debt vary according to the country in
which the funds are borrowed, but generally approximate the market rate of
interest. At June 29, 2003, $22,000 of short-term debt was outstanding. The
weighted average interest rate at June 29, 2003 was 1.9%. In the United States,
the Company has an unused line of credit of $11,468, net of $22,000 in
short-term debt borrowed and $1,532 in letters of credit at June 29, 2003. The
Company is subject to limited financial covenants and is in compliance with all
of these covenants. Internationally, the Company has unused lines of credit
totaling about $11,033, with no amounts borrowed at June 29, 2003.

     Long-term debt consisted of the following:

<Table>
<Caption>
                                                              JUNE 29,   JUNE 30,
                                                                2003       2002
                                                              --------   --------
<S>                                                           <C>        <C>
Total long-term debt........................................   $2,247     $2,396
Less current maturities.....................................      694        859
                                                               ------     ------
Long-term debt, net of current maturities...................   $1,553     $1,537
                                                               ======     ======
</Table>

                                        31
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The weighted average interest rates of long-term debt, all from an
international subsidiary, at June 29, 2003 and June 30, 2002 were 19.5% and
19.6%.

     Total long-term debt at June 29, 2003 matures as follows:

<Table>
<S>                                                           <C>
2004........................................................  $  694
2005........................................................     273
2006........................................................     276
2007........................................................     260
2008........................................................     248
Thereafter..................................................     496
                                                              ------
Total.......................................................  $2,247
                                                              ======
</Table>

     Total interest paid was $638, $615 and $1,309 for 2003, 2002 and 2001.

(7) INCOME TAXES:

     The provision for income taxes consisted of the following:

<Table>
<Caption>
                                                              2003     2002     2001
                                                             ------   ------   ------
<S>                                                          <C>      <C>      <C>
Federal....................................................  $1,927   $4,503   $4,633
State......................................................     616      322      348
Foreign....................................................   2,362    1,872    3,128
                                                             ------   ------   ------
  Total current provision..................................   4,905    6,697    8,109
                                                             ------   ------   ------
Federal....................................................   4,545    2,865      410
Foreign....................................................    (128)      11     (167)
                                                             ------   ------   ------
  Total deferred provision.................................   4,417    2,876      243
                                                             ------   ------   ------
  Income tax expense.......................................  $9,322   $9,573   $8,352
                                                             ======   ======   ======
Total income taxes paid....................................  $8,639   $8,208   $8,928
                                                             ======   ======   ======
</Table>

     The difference between the statutory United States federal income tax rate
and the Company's global effective tax rate as reflected in the consolidated
statements of income was as follows:

<Table>
<Caption>
                                             2003                     2002                     2001
                                    ----------------------   ----------------------   ----------------------
                                       TAX      PERCENT OF      TAX      PERCENT OF      TAX      PERCENT OF
                                     EXPENSE      PRETAX      EXPENSE      PRETAX      EXPENSE      PRETAX
                                    (BENEFIT)     INCOME     (BENEFIT)     INCOME     (BENEFIT)     INCOME
                                    ---------   ----------   ---------   ----------   ---------   ----------
<S>                                 <C>         <C>          <C>         <C>          <C>         <C>
Taxes at U.S. Federal statutory
  rate............................   $13,442       35.0%      $12,262       35.0%      $ 9,782       35.0%
Resolution of issues at less than
  estimate previously provided....    (1,558)      (4.1)         (903)      (2.6)
Alternative fuels credit..........      (535)      (1.4)         (548)      (1.6)         (546)      (2.0)
Foreign earnings subject to tax
  rates that are different from
  the U.S. federal statutory
  rate............................    (1,288)      (3.4)       (1,809)      (5.1)       (1,229)      (4.4)
State taxes, net of federal
  benefit.........................       400        1.0           209        0.6           226        0.8
Taxes on dividends received from
  foreign subsidiaries............       124        0.3            77        0.2           780        2.8
Other.............................    (1,263)      (3.1)          285        0.8          (661)      (2.3)
                                     -------       ----       -------       ----       -------       ----
  Income tax expense/effective
     rate.........................   $ 9,322       24.3%      $ 9,573       27.3%      $ 8,352       29.9%
                                     =======       ====       =======       ====       =======       ====
</Table>

                                        32
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The components of deferred taxes were as follows:

<Table>
<Caption>
                                                              JUNE 29,   JUNE 30,
                                                                2003       2002
                                                              --------   --------
<S>                                                           <C>        <C>
Accrued liabilities.........................................  $ 1,647    $ 1,599
Allowance for doubtful accounts.............................      328        551
State taxes.................................................      525        381
Inventories.................................................      188
Staff termination indemnities...............................      459        131
Other.......................................................        2          2
                                                              -------    -------
  Total deferred tax assets.................................    3,149      2,664
                                                              -------    -------
Property, plant and equipment and other.....................   13,211     10,379
Accrued employee benefits...................................    2,395        363
Inventories.................................................                  16
Marketable securities.......................................       55          1
                                                              -------    -------
  Total deferred tax liabilities............................   15,661     10,759
                                                              -------    -------
     Net deferred tax liabilities...........................  $12,512    $ 8,095
                                                              =======    =======
</Table>

     Income of foreign subsidiaries before income taxes and minority interests
was $13,894, $13,334 and $10,603 for 2003, 2002 and 2001.

     The Company does not provide deferred income taxes on unremitted earnings
of foreign subsidiaries, since such earnings are considered to be permanently
invested. Cumulative unremitted earnings of foreign subsidiaries were $68,292,
$58,492 and $48,251 as of June 29, 2003, June 30, 2002 and July 1, 2001.

(8) PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS:

     Riviana has defined benefit plans covering substantially all United States
and certain international employees. The benefits are based on years of service
and the employee's compensation. The Company's funding policy is to contribute
annually at least the minimum amounts actuarially necessary to provide for
retirement benefits.

     The following sets forth summarized information regarding the Company's
defined benefit retirement plans:

<Table>
<Caption>
                                                    UNITED STATES      INTERNATIONAL
                                                  -----------------   ----------------
                                                   2003      2002      2003      2002
                                                  -------   -------   -------   ------
<S>                                               <C>       <C>       <C>       <C>
Change in projected benefit obligations:
  Benefit obligations at the beginning of
     year.......................................  $31,320   $26,609   $ 8,508   $7,801
  Service cost: Employer........................    2,760     2,501       130      227
               Employees........................                           94       91
  Interest cost.................................    2,178     1,934       533      504
  Amendments....................................   (3,912)       83                  6
  Actuarial (gain) loss.........................    6,205     1,912     2,612     (569)
  Foreign exchange impact.......................                          770      648
  Plan disbursements............................   (2,084)   (1,719)     (281)    (200)
                                                  -------   -------   -------   ------
  Benefit obligations at the end of year........  $36,467   $31,320   $12,366   $8,508
                                                  =======   =======   =======   ======
</Table>

                                        33
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                    UNITED STATES      INTERNATIONAL
                                                  -----------------   ----------------
                                                   2003      2002      2003      2002
                                                  -------   -------   -------   ------
<S>                                               <C>       <C>       <C>       <C>
Change in plan assets:
  Fair value of plan assets at beginning of
     year.......................................  $29,752   $27,279   $ 7,529   $6,789
  Actual return on plan investments.............      915    (2,608)     (462)    (631)
  Contributions: Employer.......................    8,800     6,800       308      904
                Employee........................                           94       97
  Foreign exchange impact.......................                          561      570
  Plan disbursements............................   (2,084)   (1,719)     (281)    (200)
                                                  -------   -------   -------   ------
  Fair value of plan assets at end of year......  $37,383   $29,752   $ 7,749   $7,529
                                                  =======   =======   =======   ======
Funded status:
  Funded status at end of year..................  $   916   $(1,568)  $(4,617)  $ (979)
  Unrecognized net (gain) loss from experience
     different from that assumed................   12,305     5,074     5,648    1,998
  Unrecognized prior service costs..............   (2,679)      797
                                                  -------   -------   -------   ------
  Net asset (liability) recognized..............  $10,542   $ 4,303   $ 1,031   $1,019
                                                  =======   =======   =======   ======
Amounts recognized in balance sheets:
     Asset......................................  $10,542   $ 4,303   $ 1,031   $1,019
                                                  =======   =======   =======   ======
Weighted average assumptions:
  Discount rate.................................     6.0 %     7.25%     5.25%     6.0%
  Long-term rate of compensation increase.......     4.0       4.5       3.5       3.5
  Long-term rate of return on plan assets.......     8.75      9.0       7.1       7.5
</Table>

     Components of net periodic pension costs:

<Table>
<Caption>
                                         UNITED STATES              INTERNATIONAL
                                  ---------------------------   ---------------------
                                   2003      2002      2001     2003    2002    2001
                                  -------   -------   -------   -----   -----   -----
<S>                               <C>       <C>       <C>       <C>     <C>     <C>
Service cost: Employer..........  $ 2,760   $ 2,501   $ 2,351   $ 130   $ 227   $ 313
             Employees..........                                   94      91     125
Interest cost...................    2,178     1,934     1,744     533     504     502
Expected return on plan
  assets........................   (2,903)   (2,539)   (2,275)   (590)   (559)   (568)
Amortization of transition/prior
  service costs.................      132        80       (11)            217
Amortization of actuarial (gain)
  loss..........................      394      (125)     (371)    296     156      59
                                  -------   -------   -------   -----   -----   -----
Net periodic pension costs......  $ 2,561   $ 1,851   $ 1,438   $ 463   $ 636   $ 431
                                  =======   =======   =======   =====   =====   =====
</Table>

     Riviana provides death and additional retirement benefits to certain key
employees. These plans are funded through Company-owned life insurance. The net
cash surrender value of the insurance policies is recorded as a noncurrent asset
in the accompanying consolidated balance sheets. The actuarially computed
present value of the retirement benefits is recorded as an other noncurrent
liability in the accompanying consolidated balance sheets. As of June 29, 2003
and June 30, 2002, the Company had recorded net cash surrender value of $3,146
and $3,127 and present value of retirement benefit obligations of $2,971 and
$2,633. The Company recorded expense of $240, $169 and $192 related to these
plans for 2003, 2002 and 2001.

                                        34
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Riviana has a defined contribution plan which covers substantially all
United States employees. The Company contributes an amount equal to a percentage
of employee contributions. Total expense related to this plan was $724, $643 and
$717 during 2003, 2002 and 2001.

(9) RELATED PARTY TRANSACTIONS:

     The Company paid $1,155, $1,072 and $2,083 in 2003, 2002 and 2001 to W.
Elton Kennedy, a director of the Company, or entities controlled by him for rice
purchases at market prices. At June 29, 2003, the Company had commitments to
purchase an additional $628 in future rice purchases. Also, the Company and
Kennedy Rice Dryers, Inc., a corporation of which Mr. Kennedy is the principal
stockholder and a director and officer, each owns a 50% interest in South
LaFourche Farm Partnership. The Company and Mr. Kennedy are each contingently
liable on a $1,885 promissory note payable by the Partnership. The Company has
also executed transactions with other companies owned by certain directors which
were not material to the Company's results of operations or financial position.
Management of the Company believes that the foregoing transactions were on terms
no less favorable to the Company than could normally be obtained from
unaffiliated parties.

(10) COMMITMENTS AND CONTINGENCIES:

  LEASE COMMITMENTS

     At June 29, 2003, future minimum lease payments and sublease rentals under
long-term operating lease obligations amounted to:

<Table>
<Caption>
                                                                       SUBLEASE
                                                        GROSS LEASE     RENTAL    NET LEASE
                                                          PAYMENTS      INCOME    PAYMENTS
                                                        ------------   --------   ---------
<S>                                                     <C>            <C>        <C>
2004..................................................    $ 3,651        $184      $ 3,467
2005..................................................      3,103           1        3,102
2006..................................................      2,528                    2,528
2007..................................................      1,357                    1,357
2008..................................................        218                      218
Thereafter............................................        124                      124
                                                          -------        ----      -------
  Total...............................................    $10,981        $185      $10,796
                                                          =======        ====      =======
</Table>

     Rent expense net of rental income was $3,905, $3,733 and $3,560 for 2003,
2002 and 2001.

  LITIGATION

     Various actions and claims, which arose in the ordinary course of business,
are pending against the Company. In the opinion of management, the ultimate
liability, if any, which may result from these actions and claims will not
materially affect the financial position or future results of operations of the
Company.

  BUY-SELL AGREEMENT

     As of June 29, 2003, the Company had a $8,175 investment in Boost which
represents a 49% ownership interest. The Boost stockholder agreement provides
that either stockholder has the right to purchase the other's interest. The
initial bid price offered by one stockholder to the other, if not accepted,
would require the rejecting stockholder to counteroffer the initial bid price
plus five percent. Each rejection thereafter would also require a five percent
premium over the prior offer until one stockholder accepts.

                                        35
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  LOAN GUARANTEES

     As of June 29, 2003, the Company co-guaranteed two loans made to Herto N.V.
by foreign banks. A loan made in 2002 contains terms which provide for a maximum
credit available to Herto N.V. of E 7.5 million ($8,572) reducing over the term
with a final maturity in 2008. The Company has provided the bank with an
unconditional guarantee for an amount not to exceed 50% of the maximum credit
facility of E 7.5 million. The Company has an indemnity agreement from one of
the other three shareholders of Herto N.V. that provides the Company would be
reimbursed for 33 1/3% of any payment it was required to make under the terms of
the guarantee. This guarantee was made prior to December 30, 2002, the effective
date of FIN No. 45. Accordingly, no liability has been recorded by the Company.

     A second loan made in May 2003 contains terms which provide for a maximum
credit to Herto N.V. of E 3.0 million ($3,429) with repayment beginning in 2005
with the final installment due in 2007. The Company has provided the bank with
an unconditional guarantee for an amount not to exceed E 1.0 million ($1,143).
The Company has calculated the fair value of the guarantee and determined it to
be immaterial.

     As of June 29, 2003, the Company was contingently liable on a $1,885
promissory note payable by South LaFourche Farm Partnership. The guarantee was
made prior to December 30, 2002, the effective date of FIN No. 45. Accordingly,
no liability has been recorded by the Company. See Note 9, "Related party
transactions."

(11) CAPITAL STOCK:

  COMMON STOCK

     At June 29, 2003, the Company had outstanding 1,586 shares of common stock
sold before the Company's 1995 initial public offering to directors, officers
and key employees of the Company or Boost at a discount of $1,632. The amount of
discount was determined by the Board of Directors and represents a percentage
reduction of about 50% from the formula based estimate of fair value at the time
of sale. A majority of the shares discounted were sold as an inducement for
predecessor management to continue employment and to participate in the initial
capitalization of the Company in 1986. The discount is recorded in the
accompanying consolidated financial statements as a reduction of stockholders'
equity. Under a contractual agreement with the stockholders, the discount must
be repaid when the shares are sold.

     The Company's common stock trades on The Nasdaq Stock Market (trading
symbol "RVFD").

  PREFERRED STOCK

     At June 29, 2003, 5,000 shares of $1.00 per share par value preferred stock
are authorized. No shares of preferred stock have been issued.

(12) STOCK OPTION PLANS:

     On December 28, 1994, and October 22, 1997, the Company's stockholders
adopted incentive stock option plans (1994 Plan and 1997 Plan). On October 16,
2002, the Company's stockholders amended the 1997 Plan to increase by 1,000
shares the authorized shares of common stock to be granted under the 1997 Plan.
On October 11, 1995, the Company's stockholders adopted a non-employee directors
stock option plan (1995 NEDSOP) which was retroactively effective May 17, 1995.
Collectively, these are the "Plans".

     Under the 1994 Plan and 1997 Plan, a total of 795 and 2,000 shares of
common stock have been reserved for issuance pursuant to options that may be
granted by a committee of the Board of Directors to eligible employees of the
Company or Boost, including officers. Options granted allow the holders of the
options to purchase shares of common stock at the fair market value on the date
of the grant for a period of ten years. No options will become exercisable
sooner than one year after the date of the grant.

                                        36
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The 1995 NEDSOP, as amended, permits the issuance of options to purchase up
to 250 shares of common stock to directors who are not employees of the Company
and who beneficially own less than 2% of the outstanding common stock of the
Company. Such directors receive options to purchase 2 shares annually on May 17.
Options granted allow holders of the options to purchase shares of common stock
at the fair market value on the date of the grant for a period of ten years. No
options will become exercisable sooner than one year after the date of the
grant.

     The Plans' activity is summarized below:

<Table>
<Caption>
                                                 2003                2002                2001
                                           -----------------   -----------------   -----------------
                                                    WEIGHTED            WEIGHTED            WEIGHTED
                                                    AVERAGE             AVERAGE             AVERAGE
                                                    EXERCISE            EXERCISE            EXERCISE
                                           SHARES    PRICE     SHARES    PRICE     SHARES    PRICE
                                           ------   --------   ------   --------   ------   --------
<S>                                        <C>      <C>        <C>      <C>        <C>      <C>
Options outstanding beginning of year....  1,324     $17.70    1,238     $17.30    1,096     $17.44
Granted..................................    228      24.80      255      17.97      248      16.54
Exercised................................   (161)     16.48     (131)     14.29      (34)     12.80
Canceled.................................     (8)     18.98      (38)     18.34      (72)     18.91
                                           -----               -----               -----
End of year:
  Options outstanding....................  1,383      19.01    1,324      17.70    1,238      17.30
                                           =====               =====               =====
  Options exercisable....................    467      17.08      415      16.60      451      15.07
                                           =====               =====               =====
  Options outstanding price range........   $12.00 - $26.49     $12.00 - $23.92     $12.00 - $22.41
</Table>

Options outstanding at June 29, 2003 have a weighted average remaining
contractual life of 6.2 years.

(13) BUSINESS ACQUISITION:

     Effective February 10, 2003, the Company purchased all of the Rice
Specialties business of ACH Food Companies, Inc. (ACH) for about $25,431. The
business located in Brinkley, Arkansas, and Mobile, Alabama, manufactures and
sells a variety of rice products including quick-cooking rice for the U.S. food
manufacturing, retail and foodservice industry. The results of operations are
included in the Company's financial statements beginning February 10, 2003.

     The following summarizes the fair values of the assets acquired and
liability assumed at the date of acquisition:

<Table>
<S>                                                           <C>
Working capital.............................................  $ 2,753
Property, plant and equipment...............................   12,653
Goodwill....................................................    9,585
Other.......................................................      440
                                                              -------
  Net assets acquired.......................................  $25,431
                                                              =======
</Table>

     The $9,585 of goodwill is expected to be deductible for tax purposes.

(14) SEGMENT INFORMATION:

  INDUSTRY SEGMENTS

     The Company operates in one dominant industry segment which involves the
processing, marketing and distribution of food products.

                                        37
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  GEOGRAPHIC SEGMENTS

     The Company classifies its business into three reportable segments:
Domestic (includes the United States and Puerto Rico), Europe (includes the
United Kingdom and Belgium) and Central America (includes Guatemala and Costa
Rica). The Company's operations have been aggregated into these reportable
segments based on similar economic characteristics and operations which are
similar in nature as to products and production processes, types of customers
and distribution methods.

     The Company's export sales, other than those intercompany sales reported
below as sales between geographic areas, are not significant. Sales between
geographic areas consist of sales of raw materials and finished food products
which are sold at adjusted market prices. Corporate assets consist primarily of
cash, cash equivalents, marketable securities, investments in unconsolidated
affiliates and other assets.

     The Company's geographic area data are as follows:

<Table>
<Caption>
                                                                2003       2002       2001
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Sales to unaffiliated customers:
  Domestic..................................................  $253,467   $244,403   $244,994
  Europe....................................................    54,388     46,872     53,031
  Central America...........................................    88,452     83,789     83,974
                                                              --------   --------   --------
      Total consolidated....................................  $396,307   $375,064   $381,999
                                                              ========   ========   ========
Sales between geographic areas:
  Domestic..................................................  $     65   $    312   $    271
  Central America...........................................    19,886     18,347     18,449
  Eliminations..............................................   (19,951)   (18,659)   (18,720)
                                                              --------   --------   --------
      Total consolidated....................................  $      0   $      0   $      0
                                                              ========   ========   ========
Income:
  Operating income:
    Domestic................................................  $ 35,361   $ 32,499   $ 26,583
    Europe..................................................     1,106      1,723       (880)
    Central America.........................................    10,483     10,054     10,333
                                                              --------   --------   --------
      Total operating income................................    46,950     44,276     36,036
    General corporate expenses..............................   (11,147)   (10,682)    (9,885)
                                                              --------   --------   --------
    Income from operations..................................    35,803     33,594     26,151
  Interest expense..........................................      (706)      (527)    (1,343)
  Equity in earnings of unconsolidated affiliates...........     2,814      2,798      2,164
  Other income, net.........................................       496       (830)       977
                                                              --------   --------   --------
    Income before income taxes and minority interests.......  $ 38,407   $ 35,035   $ 27,949
                                                              ========   ========   ========
Identifiable assets at end of year:
  Domestic..................................................  $161,730   $128,083   $131,746
  Europe....................................................    30,139     24,332     21,040
  Central America...........................................    56,444     49,708     44,270
                                                              --------   --------   --------
      Total identifiable assets.............................   248,313    202,123    197,056
  Corporate.................................................    25,637     20,591     11,237
                                                              --------   --------   --------
      Total assets..........................................  $273,950   $222,714   $208,293
                                                              ========   ========   ========
Long lived assets:
  Domestic..................................................  $103,545   $ 78,905   $ 77,663
  Europe....................................................    10,390      9,579      7,364
  Central America...........................................    14,541     13,730     13,412
  Corporate.................................................    19,259     11,842      7,642
                                                              --------   --------   --------
      Total consolidated....................................  $147,735   $114,056   $106,081
</Table>

                                        38
<PAGE>
                      RIVIANA FOODS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                                2003       2002       2001
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
                                                              ========   ========   ========
Depreciation and amortization:
  Domestic..................................................  $  6,478   $  5,557   $  4,798
  Europe....................................................       118        133        186
  Central America...........................................     1,828      1,620      1,631
  Corporate.................................................       201        219        264
                                                              --------   --------   --------
      Total consolidated....................................  $  8,625   $  7,529   $  6,879
                                                              ========   ========   ========
Capital expenditures:
  Domestic..................................................  $  8,495   $  6,851   $ 10,240
  Europe....................................................        94         38         50
  Central America...........................................     3,487      2,744      1,588
  Corporate.................................................       563        117         39
                                                              --------   --------   --------
      Total consolidated....................................  $ 12,639   $  9,750   $ 11,917
                                                              ========   ========   ========
Investment in unconsolidated affiliates:
  Corporate.................................................  $  2,842   $  2,192   $  2,556
  Europe....................................................     9,955      9,153      6,875
                                                              --------   --------   --------
      Total consolidated....................................  $ 12,797   $ 11,345   $  9,431
                                                              ========   ========   ========
</Table>

(15) UNAUDITED QUARTERLY FINANCIAL DATA:

<Table>
<Caption>
                                                                     QUARTERS ENDED
                                                        -----------------------------------------
                                                        SEPTEMBER   DECEMBER    MARCH      JUNE       YEAR
                                                        ---------   --------   -------   --------   --------
<S>                                                     <C>         <C>        <C>       <C>        <C>
2003
  Net sales...........................................   $95,214    $98,229    $99,367   $103,497   $396,307
  Gross profit........................................    26,819     28,420     27,583     27,036    109,858
  Income before income taxes and minority interests...     9,044      9,780      9,507     10,076     38,407
  Net income..........................................     6,318      8,487      6,705      7,146     28,656
  Per share:
    Earnings:
      Basic...........................................      0.45       0.60       0.47       0.50       2.01
      Diluted.........................................      0.44       0.58       0.46       0.49       1.96
    Cash dividends paid...............................     0.165      0.165       0.17       0.17       0.67
  Market price:
    High..............................................     27.14      27.60      28.04      31.34      31.34
    Low...............................................     21.31      22.13      21.38      23.15      21.31
2002
  Net sales...........................................   $93,153    $98,675    $92,499   $ 90,737   $375,064
  Gross profit........................................    24,881     29,050     27,139     26,858    107,928
  Income before income taxes and minority interests...     6,677      9,959      8,823      9,576     35,035
  Net income..........................................     4,608      7,902      6,075      6,660     25,245
  Per share:
    Earnings:
      Basic...........................................      0.33       0.56       0.43       0.47       1.79
      Diluted.........................................      0.33       0.56       0.43       0.46       1.77
    Cash dividends paid...............................      0.16       0.16      0.165      0.165       0.65
  Market price:
    High..............................................     18.65      18.68      18.68      27.40      27.40
    Low...............................................     16.50      16.96      16.96      20.85      16.50
</Table>

     Earnings per share are computed independently for each of the quarters
presented. Therefore, the sum of the quarterly earnings per share may not equal
the annual earnings per share.

                                        39
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     There is nothing to be reported under this item.

ITEM 9A.  CONTROLS AND PROCEDURES

     The Company's principal executive officer and principal financial officer
evaluated the effectiveness of the Company's disclosure controls and procedures
as of the end of the period covered by this report. Based on the evaluation, the
Company's principal executive officer and principal chief financial officer
believe that:

          The Company's disclosure controls and procedures are designed to
     ensure that information required to be disclosed by the Company in the
     reports it files or submits under the Securities Exchange Act of 1934 is
     recorded, processed, summarized and reported within the time periods
     specified in the SEC's rules and forms; and

          The Company's disclosure controls and procedures were effective as of
     the end of the period covered by this report to ensure such information was
     accumulated and communicated to the Company's management, including the
     Company's principal executive officer and the principal financial officer,
     as appropriate, to allow timely decisions regarding required disclosure.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information relating to the Directors of the Company is set forth under the
captions "General" and "The Company recommends Voting "FOR" the nominees" in the
Proxy Statement and is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

     Information relating to executive compensation is set forth under the
captions "Compensation Tables" and "Retirement Plan" in the Proxy Statement and
is incorporated herein by reference.

EQUITY COMPENSATION PLAN INFORMATION

     The following table summarizes share and exercise price information about
the Company's equity compensation plans as of June 29, 2003, including the
Company's 1994 Stock Option Plan, 1997 Stock Option Plan and 1995 Non-Employee
Director Stock Option Plan, as amended and restated (together, the "Plans").
Stockholders have approved the Plans.

<Table>
<Caption>
                                                                                            NUMBER OF
                                                                                            SECURITIES
                                                  NUMBER OF            WEIGHTED-       REMAINING AVAILABLE
                                               SECURITIES TO BE     AVERAGE EXERCISE   FOR FUTURE ISSUANCE
                                                 ISSUED UPON            PRICE OF           UNDER EQUITY
                                                   EXERCISE           OUTSTANDING       COMPENSATION PLANS
                                                OF OUTSTANDING          OPTIONS,            (EXCLUDING
                                              OPTIONS, WARRANTS       WARRANTS AND     SECURITIES REFLECTED
PLAN CATEGORY                                     AND RIGHTS             RIGHTS           IN COLUMN (a))
-------------                                --------------------   ----------------   --------------------
                                                  (a)                     (b)               (c)
<S>                                          <C>                    <C>                <C>
Equity compensation plans approved by
  security holders:
  Employee plans...........................       1,299,182             $19.04              1,024,811
  Non-Employee Directors plan..............          84,000              18.58                166,000
Equity compensation plans not approved by
  security holders.........................            None         Not applicable               None
                                                  ---------                                 ---------
Total......................................       1,383,182             $19.01              1,190,811
                                                  =========                                 =========
</Table>

                                        40
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information relating to the ownership of equity securities of the Company
by certain beneficial owners and management is set forth under the caption
"Common Stock Outstanding and Principal Holders Thereof" in the Proxy Statement
and is incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information relating to certain relationships with a beneficial stockholder
and certain related transactions is set forth under the captions "Compensation
and Stock Option Committee Interlock and Insider Participation" and "Certain
Transactions" in the Proxy Statement and is incorporated herein by reference.

ITEM 14.  AUDITOR FEES

  AUDIT FEES

     Fees for audit services totaled approximately $484,500 in fiscal 2003 and
approximately $348,500 in fiscal 2002, including fees associated with the annual
audit, the reviews of the Company's quarterly reports on Form 10-Q and statutory
audits required internationally. In fiscal 2002 the reviews of the Company's
quarterly reports on Form 10-Q were performed by a predecessor auditor.

  AUDIT-RELATED FEES

     Fees for audit-related services totaled approximately $25,800 in fiscal
2003 and none in fiscal 2002. Audit-related services principally included fees
for the audit of the Riviana Foods Savings Plan, due diligence in connection
with an acquisition and accounting consultations. In fiscal 2002 these services
were performed by a predecessor auditor.

  TAX FEES

     Fees for tax services, including tax compliance, tax advice and tax
planning, totaled approximately $184,000 in fiscal 2003 and none in fiscal 2002.
In fiscal 2002 these services were performed by a predecessor auditor.

  ALL OTHER FEES

     The Company did not engage KPMG LLP on any other matters not otherwise
included in the above categories in either fiscal 2003 or 2002.

     The Audit Committee of the Board has adopted a policy requiring
pre-approval by the Audit Committee of all services (audit and non-audit) to be
provided to the Company by its independent auditor. Any proposed services to be
provided by the independent auditor, including proposed services exceeding
pre-approved budget levels, will require specific pre-approval by the Audit
Committee. The Audit Committee does not delegate its responsibilities to
pre-approve services performed by the independent auditor to management.

                                        41
<PAGE>

                                     PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)      (1)      Consolidated Financial Statements: - See Index to Consolidated
Financial Statements in Part II, Item 8, Financial Statements and Supplementary
Data.

         (2)      Consolidated Financial Statement Schedules - None.

         (3) Exhibits - required to be filed by Item 601 of Regulation S-K are
listed below and are filed as a part hereof. Documents not designated as being
incorporated herein by reference are filed herewith. The paragraph numbers
correspond to the exhibit numbers designated in Item 601 of Regulation S-K.

         3.1      The Company's Restated Certificate of Incorporation dated
                  December 28, 1994, is incorporated herein by reference to
                  Exhibit 3.01 to the Company's Registration Statement on Form
                  S-1, NO. 33-87838 under the Securities Act of 1933, as amended
                  (the "Registration Statement")

         3.2      The Company's By-laws, as amended effective February 21, 2002
                  are incorporated herein by reference to Exhibit 3.2 to the
                  Company's Annual Report on Form 10-K for the fiscal year ended
                  June 30, 2002, File No. 000-25294

       *10.1      Amendment to Consulting Agreement dated January 1, 1996
                  between Riviana Foods Inc. and Frank A. Godchaux III dated
                  February 1, 2001 is incorporated herein by reference to
                  Exhibit 10.1 to the Company's Annual Report on Form 10-K for
                  the fiscal year ended June 30, 2002, File No. 000-25294

       *10.2      Amendment to Consulting Agreement dated July 1, 1994
                  between Riviana Foods Inc. and Charles R. Godchaux dated
                  February 1, 2001 is incorporated herein by reference to
                  Exhibit 10.2 to the Company's Annual Report on Form 10-K for
                  the fiscal year ended June 30, 2002, File No. 000-25294

       *10.3      Benefit Restoration Plan is incorporated herein by reference
                  to Exhibit 10.03 to the Registration Statement

       *10.4      Management Security Agreement between the Registrant and
                  Joseph A. Hafner, Jr. dated July 17, 1989, is incorporated
                  herein by reference to Exhibit 10.04 to the Registration
                  Statement

        10.5      Shareholders Agreement between Sun-Land Products of California
                  and Stevens & Brotherton Ltd. dated March 24, 1994, is
                  incorporated herein by reference to Exhibit 10.05 to the
                  Registration Statement

        10.6      Shareholder Agreement among N&C Boost N.V., Arrocerias Herba,
                  S.A. and Ricegrowers' Co-Operative Limited dated January 29,
                  1992, is incorporated herein by reference to Exhibit 10.06 to
                  the Registration Statement

        10.7      Stock Purchase Agreement by and among N&C Boost N.V.,
                  Riceherba International Inc. and Ricegrowers' Co-Operative
                  Limited dated as of January 29, 1992, is incorporated herein
                  by reference to Exhibit 10.07 to the Registration Statement

        10.8      Shareholder Agreement among N&C Boost N.V., Arrocerias Herba,
                  S.A. and Herto B.V.B.A. dated January 1, 1991, as amended, is
                  incorporated herein by reference to Exhibit 10.08 to the
                  Registration Statement

        10.9      Agreement of Partnership between Riviana Foods Inc. and
                  Kennedy Rice Dryers, Inc. dated February 12, 1990, is
                  incorporated herein by reference to Exhibit 10.09 to the
                  Registration Statement

        10.10     Partnership Agreement between Riviana Foods Inc. and Riceland
                  Foods, Inc. dated March 22, 1989, is incorporated herein by
                  reference to Exhibit 10.10 to the Registration Statement

       *10.11     1994 Stock Option Plan is incorporated herein by reference to
                  Exhibit 10.11 to the Registration Statement


<PAGE>


       *10.12     Amendment and Restatement of Executive Officer's Stock
                  Purchase Agreement between Riviana Foods Inc. and W. David
                  Hanks dated December 15, 1994, is incorporated herein by
                  reference to Exhibit 10.12 to the Registration Statement

       *10.13     Amendment and Restatement of Executive Officer's Stock
                  Purchase Agreement between Riviana Foods Inc. and Jack M.
                  Nolingberg dated December 15, 1994, is incorporated herein by
                  reference to Exhibit 10.13 to the Registration Statement

       *10.14     Amendment and Restatement of Executive Officer's Stock
                  Purchase Agreement between Riviana Foods Inc. and Robert D.
                  Watts dated December 15, 1994, as amended, is incorporated
                  herein by reference to Exhibit 10.14 to the Registration
                  Statement

       *10.15     Director's Stock Purchase Agreement between Riviana Foods Inc.
                  and W. Elton Kennedy dated March 27, 1986, is incorporated
                  herein by reference to Exhibit 10.15 to the Registration
                  Statement

       *10.16     Amended and Restated 1995 Non-Employee Director Stock Option
                  Plan dated May 17, 1996, is incorporated herein by reference
                  to Exhibit 10(xvi) to the Company's Annual Report on Form 10-K
                  for the fiscal year ended June 30, 1996, File No. 000-25294

       *10.17     Amendment of Amendment and Restatement of Executive Officer's
                  Stock Purchase Agreement dated December 15, 1994, between
                  Riviana Foods Inc. and W. David Hanks dated November 8, 1996
                  is incorporated herein by reference to Exhibit 10.17 to the
                  Company's Annual Report on Form 10-K for the fiscal year ended
                  June 29, 1997, File No. 000-25294

       *10.18     Amendment of Amendment and Restatement of Executive Officer's
                  Stock Purchase Agreement dated December 15, 1994, between
                  Riviana Foods Inc. and Jack M. Nolingberg dated November 8,
                  1996 is incorporated herein by reference to Exhibit 10.18 to
                  the Company's Annual Report on Form 10-K for the fiscal year
                  ended June 30, 2002, File No. 000-25294

       *10.19     1997 Amended and Restated Stock Option Plan dated September 1,
                  1997, is incorporated herein by reference to Exhibit 10(xviv)
                  to the Company's Annual Report on Form 10-K for the fiscal
                  year ended June 28, 1998, File No. 000-25294

       *10.20     First Amendment to the Amended and Restated 1997 Stock Option
                  Plan incorporated herein by reference to Exhibit 10.20 to the
                  Quarterly Report on Form 10-Q for the period ended March 30,
                  2003, File No. 000-25294

       *10.21     Registration of additional securities pursuant to the First
                  Amendment to the Amended and Restated 1997 Stock Option Plan
                  incorporated herein by reference as the Registration Statement
                  on Form S-8 filed August 4, 2003, File No. 333-107624

       *10.22     Amendment to Amended and Restated 1995 Non-Employee Director
                  Stock Option Plan dated August 18, 2003

        21.       A list of the subsidiaries of the Registrant is incorporated
                  herein by reference to Exhibit 21.01 to the Registration
                  Statement

        23.       Consent of KPMG LLP

        31.1      Section 302 Certification of Principal Executive Officer

        31.2      Section 302 Certification of Principal Financial Officer

        32.1      Section 906 Certification of Principal Executive Officer

        32.2      Section 906 Certification of Principal Financial Officer


<PAGE>

(b)    Reports on Form 8-K.

       Current Report on Form 8-K dated February 4, 2003, reporting that the
Registrant had issued a press release announcing the execution of an asset
purchase agreement with ACH Food Companies, Inc., a copy of which was filed as
Exhibit 99.1 in that Form 8-K.

       Current Report on Form 8-K dated May 1, 2003, reporting that the
Registrant had issued a press release announcing operating results for the third
quarter ended March 30, 2003, a copy of which was filed as Exhibit 99.1 in that
Form 8-K.

       Current Report on Form 8-K dated August 21, 2003, reporting that the
Registrant had issued a press release announcing operating results for the
fourth quarter ended June 29, 2003, a copy of which was filed as Exhibit 99.1 in
that Form 8-K.


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

* Indicates a management contract or compensatory plan or arrangement


<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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, on September 12, 2003.


                                                     RIVIANA FOODS INC.
                                                       (Registrant)


                                            By     /s/ Joseph A. Hafner, Jr.
                                              ----------------------------------
                                                    JOSEPH A. HAFNER, JR.
                                                   Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated, on September 12, 2003.

<TABLE>
<CAPTION>
                 SIGNATURE                                                    CAPACITY
                 ---------                                                    --------
<S>                                                     <C>
         /s/ Joseph A. Hafner, Jr.                      Chief Executive Officer, President and Director
--------------------------------------------            (Principal Executive Officer)
             JOSEPH A. HAFNER JR.

         /s/ W. David Hanks                             Executive Vice President and Director
--------------------------------------------
             W. DAVID HANKS

         /s/ E. Wayne Ray, Jr.                          Vice President, Chief Financial Officer, Treasurer and
--------------------------------------------            Director (Principal Financial and Accounting Officer)
             E. WAYNE RAY, JR.

         /s/ Frank A. Godchaux III                      Chairman of the Board
--------------------------------------------
             FRANK A. GODCHAUX III

         /s/ Charles R. Godchaux                        Vice Chairman of the Board
--------------------------------------------
             CHARLES R. GODCHAUX

         /s/ Frank K. Godchaux                          Director
--------------------------------------------
             FRANK K. GODCHAUX

         /s/ W. Elton Kennedy                           Director
--------------------------------------------
             W. ELTON KENNEDY

         /s/ E. James Lowrey                            Director
--------------------------------------------
             E. JAMES LOWREY

         /s/ Theresa G. Payne                           Director
--------------------------------------------
             THERESA G. PAYNE

         /s/ Patrick W. Rose                            Director
--------------------------------------------
             PATRICK W. ROSE

         /s/ Thomas B. Walker, Jr.                      Director
--------------------------------------------
             THOMAS B. WALKER, JR.

         /s/ Charles H. Cotros                          Director
--------------------------------------------
             CHARLES H. COTROS
</TABLE>


<PAGE>

                                  EXHIBIT INDEX


EXHIBIT NO.       DESCRIPTION

         3.1      The Company's Restated Certificate of Incorporation dated
                  December 28, 1994, is incorporated herein by reference to
                  Exhibit 3.01 to the Company's Registration Statement on Form
                  S-1, NO. 33-87838 under the Securities Act of 1933, as amended
                  (the "Registration Statement")

         3.2      The Company's By-laws, as amended effective February 21, 2002
                  are incorporated herein by reference to Exhibit 3.2 to the
                  Company's Annual Report on Form 10-K for the fiscal year ended
                  June 30, 2002, File No. 000-25294

       *10.1      Amendment to Consulting Agreement dated January 1, 1996
                  between Riviana Foods Inc. and Frank A. Godchaux III dated
                  February 1, 2001 is incorporated herein by reference to
                  Exhibit 10.1 to the Company's Annual Report on Form 10-K for
                  the fiscal year ended June 30, 2002, File No. 000-25294

       *10.2      Amendment to Consulting Agreement dated July 1, 1994 between
                  Riviana Foods Inc. and Charles R. Godchaux dated February 1,
                  2001 is incorporated herein by reference to Exhibit 10.2 to
                  the Company's Annual Report on Form 10-K for the fiscal year
                  ended June 30, 2002, File No. 000-25294

       *10.3      Benefit Restoration Plan is incorporated herein by reference
                  to Exhibit 10.03 to the Registration Statement

       *10.4      Management Security Agreement between the Registrant and
                  Joseph A. Hafner, Jr. dated July 17, 1989, is incorporated
                  herein by reference to Exhibit 10.04 to the Registration
                  Statement

        10.5      Shareholders Agreement between Sun-Land Products of California
                  and Stevens & Brotherton Ltd. dated March 24, 1994, is
                  incorporated herein by reference to Exhibit 10.05 to the
                  Registration Statement

        10.6      Shareholder Agreement among N&C Boost N.V., Arrocerias Herba,
                  S.A. and Ricegrowers' Co-Operative Limited dated January 29,
                  1992, is incorporated herein by reference to Exhibit 10.06 to
                  the Registration Statement

        10.7      Stock Purchase Agreement by and among N&C Boost N.V.,
                  Riceherba International Inc. and Ricegrowers' Co-Operative
                  Limited dated as of January 29, 1992, is incorporated herein
                  by reference to Exhibit 10.07 to the Registration Statement

        10.8      Shareholder Agreement among N&C Boost N.V., Arrocerias Herba,
                  S.A. and Herto B.V.B.A. dated January 1, 1991, as amended, is
                  incorporated herein by reference to Exhibit 10.08 to the
                  Registration Statement

        10.9      Agreement of Partnership between Riviana Foods Inc. and
                  Kennedy Rice Dryers, Inc. dated February 12, 1990, is
                  incorporated herein by reference to Exhibit 10.09 to the
                  Registration Statement

        10.10     Partnership Agreement between Riviana Foods Inc. and Riceland
                  Foods, Inc. dated March 22, 1989, is incorporated herein by
                  reference to Exhibit 10.10 to the Registration Statement

       *10.11     1994 Stock Option Plan is incorporated herein by reference to
                  Exhibit 10.11 to the Registration Statement

       *10.12     Amendment and Restatement of Executive Officer's Stock
                  Purchase Agreement between Riviana Foods Inc. and W. David
                  Hanks dated December 15, 1994, is incorporated herein by
                  reference to Exhibit 10.12 to the Registration Statement

       *10.13     Amendment and Restatement of Executive Officer's Stock
                  Purchase Agreement between Riviana Foods Inc. and Jack M.
                  Nolingberg dated December 15, 1994, is incorporated herein by
                  reference to Exhibit 10.13 to the Registration Statement


<PAGE>

       *10.14     Amendment and Restatement of Executive Officer's Stock
                  Purchase Agreement between Riviana Foods Inc. and Robert D.
                  Watts dated December 15, 1994, as amended, is incorporated
                  herein by reference to Exhibit 10.14 to the Registration
                  Statement

       *10.15     Director's Stock Purchase Agreement between Riviana Foods Inc.
                  and W. Elton Kennedy dated March 27, 1986, is incorporated
                  herein by reference to Exhibit 10.15 to the Registration
                  Statement

       *10.16     Amended and Restated 1995 Non-Employee Director Stock Option
                  Plan dated May 17, 1996, is incorporated herein by reference
                  to Exhibit 10(xvi) to the Company's Annual Report on Form 10-K
                  for the fiscal year ended June 30, 1996, File No. 000-25294

       *10.17     Amendment of Amendment and Restatement of Executive Officer's
                  Stock Purchase Agreement dated December 15, 1994, between
                  Riviana Foods Inc. and W. David Hanks dated November 8, 1996
                  is incorporated herein by reference to Exhibit 10.17 to the
                  Company's Annual Report on Form 10-K for the fiscal year ended
                  June 29, 1997, File No. 000-25294

       *10.18     Amendment of Amendment and Restatement of Executive Officer's
                  Stock Purchase Agreement dated December 15, 1994, between
                  Riviana Foods Inc. and Jack M. Nolingberg dated November 8,
                  1996 is incorporated herein by reference to Exhibit 10.18 to
                  the Company's Annual Report on Form 10-K for the fiscal year
                  ended June 30, 2002, File No. 000-25294

       *10.19     1997 Amended and Restated Stock Option Plan dated September 1,
                  1997, is incorporated herein by reference to Exhibit 10(xviv)
                  to the Company's Annual Report on Form 10-K for the fiscal
                  year ended June 28, 1998, File No. 000-25294

       *10.20     First Amendment to the Amended and Restated 1997 Stock Option
                  Plan incorporated herein by reference to Exhibit 10.20 to the
                  Quarterly Report on Form 10-Q for the period ended March 30,
                  2003, File No. 000-25294

       *10.21     Registration of additional securities pursuant to the First
                  Amendment to the Amended and Restated 1997 Stock Option Plan
                  incorporated herein by reference as the Registration Statement
                  on Form S-8 filed August 4, 2003, File No. 333-107624

       *10.22     Amendment to Amended and Restated 1995 Non-Employee Director
                  Stock Option Plan dated August 18, 2003

        21.       A list of the subsidiaries of the Registrant is incorporated
                  herein by reference to Exhibit 21.01 to the Registration
                  Statement

        23.       Consent of KPMG LLP

        31.1      Section 302 Certification of Principal Executive Officer

        31.2      Section 302 Certification of Principal Financial Officer

        32.1      Section 906 Certification of Principal Executive Officer

        32.2      Section 906 Certification of Principal Financial Officer


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

* Indicates a management contract or compensatory plan or arrangement