<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

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

         For the Quarterly Period Ended December 2, 2001

                                       OR

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

                        Commission File Number -- 0-17896

                            HANOVER FOODS CORPORATION
             (Exact name of Registrant as specified in its charter)

Commonwealth of Pennsylvania                                 23-0670710
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

1486 York Road, P.O. Box 334, Hanover, PA                    17331
(Address of principal executive offices)                     (Zip Code)

717-632-6000
(Registrant's telephone number, including area code)

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

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

<TABLE>
<CAPTION>
                     Class                       Outstanding at December 2, 2001
                     -----                       -------------------------------
<S>                                              <C>
      Class A Common Stock, $25 par value                 288,247 shares

      Class B Common Stock, $25 par value                 568,698 shares
</TABLE>


                                       1
<PAGE>
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES

                                    FORM 10-Q

                 For the Twenty Six Weeks Ended December 2, 2001


<TABLE>
<CAPTION>
Index                                                                        Page
<S>                                                                          <C>
Part I -- Financial Information

    Item 1 -- Financial Statements:

       Condensed Consolidated Balance Sheets
          December 2, 2001 (Unaudited) and June 2, 2001 .................      3

       Condensed Consolidated Statements of Operations (Unaudited)
          Twenty Six Weeks Ended and Thirteen Weeks Ended
          December 2, 2001 and November 26, 2000 ........................      5

       Condensed Consolidated Statements of Stockholders'
          Equity, (Unaudited) Twenty-Six Weeks Ended December 2, 2001 ...      6

       Condensed Consolidated Statements of Cash Flows
          (Unaudited), Twenty Six Weeks Ended December 2, 2001
          and November 26, 2000 .........................................      7

       Notes to Condensed Consolidated Financial Statements
          (Unaudited) ...................................................      8

    Item 2 -- Management's Discussion and Analysis of Financial
             Condition and Results of Operations ........................     17

Part II -- Other Information ............................................     21

    Item 1 -- Legal Proceedings .........................................     21
    Items 2-5 -- None ...................................................     21
    Item 6 -- Exhibits and Reports on Form 8-K ..........................     21
</TABLE>


                                       2
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                          Item 1. Financial Statements
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                      December 2, 2001   June 3, 2001
                                                      ----------------   ------------
                                                         (Unaudited)
<S>                                                   <C>                <C>
ASSETS
Current Assets:
      Cash and Cash Equivalents                         $  4,497,000     $  1,824,000
      Accounts and Notes Receivable, Net                  28,636,000       27,411,000
      Accounts Receivable from Related Parties, Net          159,000          115,000
      Inventories:
         Finished Goods                                   62,240,000       44,387,000
         Raw Materials & Supplies                         18,574,000       16,907,000
      Prepaid Expenses                                     2,151,000        1,930,000
      Deferred Income Taxes                                  917,000          917,000
                                                        ------------     ------------
Total Current Assets                                     117,174,000       93,491,000
                                                        ------------     ------------
Property, Plant and Equipment, at Cost:
      Land and Buildings                                  52,272,000       52,140,000
      Machinery and Equipment                            120,288,000      114,649,000
      Leasehold Improvements                                 544,000          535,000
                                                        ------------     ------------
                                                         173,104,000      167,324,000
      Less Accumulated Depreciation and                   97,316,000       92,924,000
        Amortization
                                                        ------------     ------------
                                                          75,788,000       74,400,000

      Construction in Progress                             2,317,000        4,437,000
                                                        ------------     ------------
Total Property, Plant and Equipment                       78,105,000       78,837,000
                                                        ------------     ------------

Other Assets:
      Intangible Assets, Net                               3,642,000        3,735,000
      Other Assets                                         5,045,000        4,665,000
                                                        ------------     ------------
Total Assets                                             203,966,000      180,728,000
                                                        ------------     ------------
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets


<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY                          December 2, 2001     June 3, 2001
                                                              ----------------     ------------
                                                                 (Unaudited)
<S>                                                           <C>                  <C>
Current Liabilities:
      Notes Payable - Banks                                     $  34,820,000         52,328,000
      Accounts Payable                                             25,915,000         24,062,000
      Accrued Expenses                                             15,954,000          7,835,000
      Current Maturities of Long-Term Debt                          4,299,000          1,801,000
      Income Taxes Payable                                          1,486,000            639,000
                                                                -------------         ----------
Total Current Liabilities                                          82,474,000         86,665,000
                                                                -------------         ----------
Long-Term Debt, Less Current Maturities                            31,434,000          8,940,000
Deferred Income Taxes                                               3,822,000          4,022,000
Other Liabilities                                                   4,004,000          3,636,000
                                                                -------------         ----------
Total Liabilities                                                 121,734,000        103,263,000
                                                                -------------         ----------
Stockholders' Equity:
      Series A & B 8.25% cumulative convertible preferred,
        $25 par value; 120,000 shares authorized; 31,216
        shares issued at June 3, 2001 and December 2, 2001;
        14,724 shares outstanding at June 3, 2001 and
        December 2, 2001                                        $     780,000            780,000
Series C cumulative convertible preferred, $25 par value;
        10,000 shares authorized; 10,000
        shares issued and outstanding                                 250,000            250,000
Common stock, Class A, non-voting, $25 par value;
        800,000 shares authorized, 349,292 shares issued
        at June 3, 2001 and December 2, 2001; 288,247
        shares outstanding at June 3, 2001 and
        December 2, 2001                                            8,732,000          8,732,000
Common stock, Class B, voting, $25 par value;
        880,000 shares authorized, 635,572 shares issued,
        at June 3, 2001 and December 2, 2001; 426,249
        shares outstanding at June 3, 2001 and
        December 2, 2001                                           15,889,000         15,889,000
Capital Paid in Excess of Par Value                                15,254,000         15,254,000
Retained Earnings                                                  66,080,000         61,273,000
Treasury Stock, at Cost                                            (8,148,000)        (8,148,000)
Values of Shares Held in Employee Benefit Trust -
142,449 Shares At June 3, 2001 and December 2, 2001               (16,667,000)       (16,667,000)
Accumulated Other Comprehensive Income                                 62,000            102,000
                                                                -------------         ----------
Total Stockholders' Equity                                         82,232,000         77,465,000
                                                                -------------         ----------
Total Liabilities and Stockholders' Equity                        203,966,000        180,728,000
                                                                -------------         ----------
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
           Condensed Consolidated Statements of Operations - Unaudited


<TABLE>
<CAPTION>
                                                      26 WEEKS                          13 WEEKS
                                                        ENDED                             ENDED
                                             December 2,     November 26,      December 2,     November 26,
                                                2001             2000             2001             2000
                                                ----             ----             ----             ----
                                                             (as restated)                     (as restated)
<S>                                         <C>              <C>              <C>              <C>
Net Sales                                   $150,477,000     $151,603,000     $ 87,097,000     $ 86,569,000
Cost of Goods Sold                           114,872,000      113,409,000       65,519,000       64,099,000
                                            ------------     ------------     ------------     ------------
Gross Profit                                  35,605,000       38,194,000       21,578,000       22,470,000

Selling Expenses                              19,575,000       22,779,000       11,705,000       13,220,000
Administrative Expenses                        5,861,000        5,670,000        2,760,000        2,781,000
                                            ------------     ------------     ------------     ------------
Operating Profit                              10,169,000        9,745,000        7,113,000        6,469,000

Interest Expense                               1,874,000        2,407,000        1,005,000        1,276,000
Other Expenses, Net                              465,000          406,000          262,000          170,000
                                            ------------     ------------     ------------     ------------
Earnings Before Income Taxes                   7,830,000        6,932,000        5,846,000        5,023,000

Income Taxes                                   2,531,000        2,550,000        1,988,000        1,815,000
                                            ------------     ------------     ------------     ------------
Net Earnings                                   5,299,000        4,382,000        3,858,000        3,208,000

Dividends on Preferred Stock                      21,000           21,000           11,000           11,000
                                            ------------     ------------     ------------     ------------
Net Earnings Applicable to Common Stock        5,278,000     $  4,361,000        3,847,000     $  3,197,000
                                            ------------     ------------     ------------     ------------
Earnings Per Share:

Net Earnings Per Common Share - Basic       $       7.39     $       6.10     $       5.38     $       4.47
                                            ------------     ------------     ------------     ------------
Net Earnings Per Common Share - Diluted     $       7.28     $       6.02     $       5.30     $       4.41
                                            ------------     ------------     ------------     ------------
Dividends per Share, Common                 $      0.550     $      0.550     $      0.275     $      0.275
                                            ------------     ------------     ------------     ------------
Basic Weighted Average Shares                    714,496          714,550          714,496          714,536
                                            ------------     ------------     ------------     ------------
Diluted Weighted Average Shares                  727,919          728,230          727,919          728,216
                                            ------------     ------------     ------------     ------------
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
                 Consolidated Statements of Stockholders' Equity
                         26 Weeks Ended December 2, 2001


<TABLE>
<CAPTION>
                                                  CUMULATIVE
                                                  CONVERTIBLE                     CUMULATIVE
                                                   PREFERRED                      CONVERTIBLE
                                                     STOCK                         PREFERRED
                                    TOTAL          SERIES A                          STOCK
                                STOCKHOLDERS'        AND B                         SERIES C
                                   EQUITY           SHARES          AMOUNT          SHARES          AMOUNT
                                   ------           ------          ------          ------          ------
<S>                             <C>              <C>             <C>             <C>             <C>
Balance, June 3, 2001           $ 77,465,000           31,216    $    780,000          10,000    $    250,000
                                ------------     ------------    ------------    ------------    ------------
Net earnings for the period        5,299,000               --              --              --              --
Cash dividends per share:
  Preferred-$2.0625 annually         (21,000)              --              --              --              --
  Common-$1.10 annually             (471,000)              --              --              --              --
Other comprehensive loss        $    (40,000)              --              --              --              --
                                ------------     ------------    ------------    ------------    ------------
Balance, December 2, 2001       $ 82,232,000           31,216    $    780,000          10,000    $    250,000
                                ============     ============    ============    ============    ============
</TABLE>


<TABLE>
<CAPTION>
                                       COMMON                          COMMON
                                        STOCK                           STOCK                       CAPITAL PAID
                                       CLASS A                         CLASS B                      IN EXCESS OF      RETAINED
                                       SHARES          AMOUNT          SHARES          AMOUNT        PAR VALUE        EARNINGS
                                       ------          ------          ------          ------        ---------        --------
<S>                                 <C>             <C>             <C>             <C>             <C>             <C>
Balance, June 3, 2001                    349,292    $  8,732,000         635,572    $ 15,889,000    $ 15,254,000    $ 61,273,000
                                    ------------    ------------    ------------    ------------    ------------    ------------
Net earnings for the period                   --              --              --              --              --    $  5,299,000
Cash dividends per share:
  Preferred-$2.0625 annually                  --              --              --              --              --         (21,000)
  Common-$1.10 annually                       --              --              --              --              --    $   (471,000)
Other comprehensive loss                      --              --              --              --              --              --
                                    ------------    ------------    ------------    ------------    ------------    ------------
Balance, December 2, 2001                349,292    $  8,732,000         635,572    $ 15,889,000    $ 15,254,000    $ 66,080,000
                                    ============    ============    ============    ============    ============    ============
</TABLE>


<TABLE>
<CAPTION>
                                                                                                   ACCUMULATED
                                  TREASURY                                                           OTHER
                                    STOCK                            EMPLOYEE STOCK TRUST         COMPREHENSIVE
                                   SHARES          AMOUNT           SHARES          AMOUNT           INCOME
                                   ------          ------           ------          ------           ------
<S>                             <C>             <C>              <C>             <C>              <C>
Balance, June 3, 2001                144,411    $ (8,148,000)         142,449    $(16,667,000)    $    102,000
                                ------------    ------------     ------------    ------------     ------------
Net earnings for the period               --              --               --              --               --
Cash dividends per share:
  Preferred-$2.0625 annually              --              --               --              --               --
  Common-$1.10 annually                   --              --               --              --               --
Other comprehensive loss                  --              --               --              --     $    (40,000)
                                ------------    ------------     ------------    ------------     ------------
Balance, December 2, 2001            144,411    $ (8,148,000)         142,449    $(16,667,000)    $     62,000
                                ============    ============     ============    ============     ============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                        6
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
           Condensed Consolidated Statements of Cash Flows (Unaudited)


<TABLE>
<CAPTION>
                                                                          26 Weeks Ended
                                                                  Dec. 2, 2001       Nov. 26, 2000
                                                                  ------------       -------------
<S>                                                               <C>                <C>
Increase (Decrease) in Cash and Cash Equivalents

Operating Activities:
      Net Earnings                                                $  5,299,000       $  4,382,000
      Adjustments to Reconcile Net Earnings to Net
            Cash (Used In) Provided by Operating Activities:
                  Depreciation and Amortization                      4,485,000          4,117,000
                  Deferred Income Taxes                               (200,000)           410,000
      Changes in Assets and Liabilities:
                  Accounts Receivable                               (1,269,000)          (147,000)
                  Inventories                                      (19,520,000)       (16,732,000)
                  Prepaid Expenses                                    (221,000)           151,000
                  Accounts Payable and Accrued Expenses              9,972,000          5,336,000
                  Income Taxes Payable                                 847,000            496,000
                  Other Liabilities                                    368,000            286,000
                                                                  ------------       ------------
Net Cash Used in Operating Activities                                 (239,000)        (1,701,000)
                                                                  ------------       ------------
Investing Activities:
      Increase in Other Assets                                        (420,000)          (119,000)
      Acquisitions of Property, Plant and Equipment                 (3,660,000)        (5,220,000)
                                                                  ------------       ------------
Net Cash Used in Investing Activities                               (4,080,000)        (5,339,000)
                                                                  ------------       ------------
Financing Activities:
      Increase (decrease) in Notes Payable                         (17,508,000)         4,478,000
      Proceeds from issuance of long-term debt                      25,000,000                 -0-
      Long-term debt payments                                           (8,000)           (20,000)
      Payment of Dividends                                            (492,000)          (413,000)
      Redemption of Common Stock                                            -0-           (13,000)
                                                                  ------------       ------------
Net Cash Provided by Financing Activities                            6,992,000          4,032,000
                                                                  ------------       ------------
Net Increase (Decrease) in Cash and Cash Equivalents                 2,673,000         (3,008,000)
Cash and Cash Equivalents, Beginning of Period                       1,824,000          6,978,000
                                                                  ------------       ------------
Cash and Cash Equivalents, End of Period                             4,497,000          3,970,000
                                                                  ------------       ------------
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       7
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                     December 2, 2001 and November 26, 2000
                                   (Unaudited)


(1)   BASIS OF PRESENTATION

      The condensed consolidated financial statements of the Registrant included
      herein have been prepared, without audit, pursuant to the rules and
      regulations of the Securities and Exchange Commission. Although certain
      information normally included in financial statements prepared in
      accordance with accounting principles generally accepted in the United
      States of America has been omitted, the Registrant believes that the
      disclosures are adequate to make the information presented not misleading.

      The Corporation's fiscal year ends at the close of operations on the
      Sunday nearest to May 31st. Accordingly, these financial statements
      reflect activity for the thirteen-week and twenty-six week periods ended
      December 2, 2001 and November 26, 2000.

      It is suggested that these condensed consolidated financial statements be
      read in conjunction with the consolidated financial statements and notes
      thereto included in Form 10-K for the Corporation's fiscal year ended June
      2, 2001.

      The condensed consolidated financial statements included herein reflect
      all adjustments (consisting only of normal recurring accruals) which, in
      the opinion of management, are necessary to present a fair statement of
      the results of the interim period.

      Amounts for the thirteen and twenty-six week periods ended November 26,
      2000 were restated to correct depreciation expenses recorded in the fourth
      quarter of the year ended June 3, 2001.

      The results for the interim periods are not necessarily indicative of
      trends or results to be expected for a full fiscal year.

(2)   SHORT-TERM BORROWINGS

      The Corporation and its subsidiaries maintain short-term unsecured lines
      of credit with various banks providing credit availability amounting to
      $45 million, of which $34,820,000 was borrowed at December 2, 2001. The
      average cost of funds during the six month period ended December 2, 2001
      was 3.56%.


                                       8
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


(3)   LONG-TERM DEBT

      The long-term debt of the Corporation and its subsidiaries consist of:

<TABLE>
<CAPTION>
                                                         December 2, 2001   June 2, 2001
                                                         ----------------   ------------
<S>                                                      <C>                <C>
      8.74% unsecured senior notes payable
            to an insurance company, due
            through 2007                                   $10,714,000      $10,714,000

      7.01% unsecured senior notes payable
            to an insurance company, due through 2011       25,000,000               -0-

      Other                                                     19,000           27,000
                                                           -----------      -----------
                                                            35,733,000       10,741,000

      Less current maturities                                4,299,000        1,801,000
                                                           -----------      -----------
      Net Long-Term Debt                                   $31,434,000      $ 8,940,000
                                                           -----------      -----------
</TABLE>

      On September 1, 2001, the Company entered into a note agreement for the
      issuance $25,000,000 of Senior Notes which bear interest of 7.01% (payable
      quarterly) and are repayable in annual installments beginning September
      15, 2002.

      The senior note agreements and the agreements for seasonal borrowing with
      financial institutions contain various restrictive provisions including
      those relating to mergers and acquisitions, additional borrowing,
      guarantees of obligations, lease commitments, limitations on declaration
      and payment of dividends, repurchase of the Corporation's stock, and the
      maintenance of working capital and certain financial ratios.

      The Corporation is in compliance with the restrictive provisions in the
      agreements as amended or waived as of December 2, 2001.


                                       9
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


(4)   RELATED PARTY TRANSACTIONS

      The Corporation and its subsidiaries, in the normal course of business,
      purchase and sell goods and services to related parties.

<TABLE>
<CAPTION>
                                      Twenty Six Weeks Ended           Thirteen Weeks Ended
                                      Dec. 2,        Nov. 26,         Dec. 2,        Nov. 26,
                                       2001            2000            2001            2000
                                       ----            ----            ----            ----
<S>                                 <C>             <C>             <C>             <C>
REVENUES:
Park 100 Foods, Inc.                $  793,000      $  952,000      $  501,000      $  508,000

EXPENDITURES:
Park 100 Foods, Inc.                $    8,000      $    8,000      $    5,000      $    8,000
ARWCO                               $       -0-     $   73,000      $       -0-     $   72,000
Warehime Enterprises, Inc.          $   79,000      $    2,000      $   78,000      $    1,000
John A. & Patricia M. Warehime      $   26,000      $   33,000      $   12,000      $   18,000
James G. Sturgill                   $       -0-     $   14,000      $       -0-     $    8,000
Lippy Brothers, Inc.                $1,158,000      $  512,000      $  844,000      $  278,000
Schaier Travel, Inc.                $    4,000      $    4,000      $    2,000      $    2,000
</TABLE>


                                       10
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


The respective December 2, 2001 and June 2, 2001 account balances with related
companies are as follows:


<TABLE>
<CAPTION>
                                            December 2, 2001        June 2, 2001
                                            ----------------        ------------
<S>                                         <C>                     <C>
ACCOUNTS RECEIVABLE:

      Park 100 Foods, Inc.                      $159,000              $121,000
                                                --------              --------

Accounts Payable:

      Lippy Brothers                            $     -0-             $  5,000
      Schaier Travel                            $     -0-             $  1,000
</TABLE>


                                       11
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


(5)   COMPREHENSIVE INCOME

      Comprehensive income is determined as follows:

<TABLE>
<CAPTION>
                                                              26 Weeks Ended                      13 Weeks Ended
                                                         Dec. 2,           Nov. 26,          Dec. 2,         Nov. 26,
                                                          2001               2000             2001             2000
                                                          ----               ----             ----             ----
<S>                                                    <C>               <C>               <C>              <C>
            Net Income                                 $ 5,299,000       $ 4,382,000       $ 3,858,000      $ 3,208,000
            Other Comprehensive Income (Loss)
            Unrealized Gain (Loss) on Investments          (40,000)         (129,000)          175,000         (311,000)
                                                       -----------       -----------       -----------      -----------
            Comprehensive Income                       $ 5,259,000       $ 4,253,000       $ 4,033,000      $ 2,897,000
                                                       ===========       ===========       ===========      ===========
</TABLE>

(6)   RECONCILIATION OF NUMERATOR AND DENOMINATOR FOR BASIC AND DILUTED EARNINGS
      PER SHARE


      Numerator for basic earnings per share:

<TABLE>
<CAPTION>
                                                 26 Weeks Ended                  13 Weeks Ended
                                             Dec. 2,        Nov. 26,         Dec. 2,        Nov. 26,
                                              2001            2000            2001            2000
                                              ----            ----            ----            ----
<S>                                        <C>             <C>             <C>             <C>
      Net earnings applicable to           $5,278,000      $4,361,000      $3,847,000      $3,197,000
      common stock

      Preferred stock dividends                21,000          21,000          11,000          11,000
                                           ----------      ----------      ----------      ----------
      Net earnings assuming dilution       $5,299,000      $4,382,000      $3,858,000      $3,208,000
                                           ==========      ==========      ==========      ==========
      Denominator:
      Basic weighted average shares           714,496         714,550         714,496         714,536
      Effect of dilutive securities            13,423          13,680          13,423          13,680
                                           ----------      ----------      ----------      ----------
      Diluted weighted average shares         727,919         728,230         727,919         728,216
                                           ==========      ==========      ==========      ==========
</TABLE>


                                       12
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


(7)   CONTINGENCIES

      LEGAL PROCEEDINGS

      DERIVATIVE ACTION

      On September 13, 1996, certain Class A common stockholders filed a
      complaint in equity against six of the Corporation's directors and the
      estate of a former director in the Court of Common Pleas of York County,
      Pennsylvania (the complaint). The suit also names the Corporation as a
      nominal defendant. The suit sought various forms of relief including, but
      not limited to, rescission of the board's April 28, 1995 approval of John
      A. Warehime's 1995 Employment Agreement and the board's February 10, 1995
      adjustment of director's fees. (Since the filing of this lawsuit, John A.
      Warehime's 1995 Employment Agreement was amended.) In addition, the
      plaintiffs sought costs and fees incident to bringing suit. On November 4,
      1996, the complaint was amended to add additional plaintiffs. On June 24,
      1997, the Court dismissed the amended complaint for failure to make a
      prior demand. An appeal was filed from the court's June 24, 1997 Order. On
      December 2, 1998, the Superior Court of Pennsylvania held that the
      derivative plaintiffs had made adequate demand.

      On May 12, 1997, a written demand was received by the Corporation from the
      attorney for those Class A common stockholders containing similar
      allegations and the allegations raised by the Class A common stockholders
      were investigated by a special independent committee of the Board of
      Directors and found to be without merit.

      The director defendants filed an Answer and New Matter to the Amended
      Complaint on March 17, 1999.

      On September 5, 2001 director defendants filed a Motion to Dismiss the
      Derivative Action. On September 20, 2001, plaintiffs' filed an answer to
      director defendants' Motion to Dismiss.

      WAREHIME FAMILY LITIGATION

      On February 21, 1997, Michael A. Warehime, a Class B shareholder, and
      certain Class A shareholders filed motions for a preliminary injunction
      against the Corporation, John A. Warehime, in his capacity as voting
      trustee, and all certain directors of the Corporation in the Court of
      Common Pleas of York County, Pennsylvania against a Proposal of the


                                       13
<PAGE>
                         PART I - FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

      Board of Directors to amend and restate the Corporation's Articles of
      Incorporation in the manner hereafter described.

      On February 13, 1997, the Board of Directors proposed an amendment and
      restatement of the Corporation's Articles of Incorporation (the "Amended
      and Restated Articles") which provides that if all of the following Class
      B Shareholders (or their estates upon the death of such stockholders),
      Michael A. Warehime, John A. Warehime, Sally W. Yelland, J. William
      Warehime, and Elizabeth W. Stick (all members of the Warehime family), do
      not agree in writing to the composition of the Board of Directors or other
      important matters specified below on or after the 1998 annual shareholders
      meeting, the trustees of the Corporation's 401(k) Savings Plan (or a
      similar employee benefit plan), acting as fiduciaries for the employees
      who participate in the Plan, and the Class A shareholders may become
      entitled to vote in the manner described in the document. Pursuant to the
      Company's Bylaws, nominations for director must be submitted to the
      Company in the manner prescribed by the Bylaws no later than June 1 of the
      year in which the meeting is to occur.

      The Amended and Restated Articles create a Series C Convertible Preferred
      Stock and also classified the terms of the Board of Directors commencing
      with the election at the 1997 annual shareholders' meeting and permit
      directors to be elected for four-year terms as permitted by Pennsylvania
      law.

      The motions for a preliminary injunction were dismissed by the Court on
      June 24, 1997. The Class B shareholders on June 25, 1997 approved the
      Amended and Restated Articles (John A. Warehime, being the sole Class B
      shareholder voting affirmatively in his capacity as voting trustee) and
      the Amended and Restated Articles became effective June 25, 1997.

      In August 1997, the Board of Directors proposed a further amendment (the
      "Amendment") Amended and Restated Articles to expand the definition of
      "disinterested directors" in the manner described below, and to approve
      certain performance based compensation for John A. Warehime solely for the
      purpose of making the Corporation eligible for a federal income tax
      deduction pursuant to Section 162(m) of the Internal Revenue Code of 1986,
      as amended. A special meeting was scheduled for August 14, 1997 (the
      "Special Meeting") to vote on these proposals. On August 8, 1997, Michael
      A. Warehime filed a motion in the Court of Common Pleas of York County,
      Pennsylvania to prevent John A. Warehime, in his capacity as voting
      trustee from voting on these proposals and to enjoin the Amendment. This
      Motion was denied by the court on August 11, 1997. The Amendment and the
      proposal under Section 162(m) were approved by Class B Shareholders (John
      A. Warehime was the sole Class B shareholder to vote


                                       14
<PAGE>
                         PART I - FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


      affirmatively, in his capacity as voting trustee) on August 14, 1997 and
      the Amendment became effective on August 14, 1997.

      Under the Amendment, the definition of "disinterested directors" means the
      person who, in the opinion of counsel for the Corporation, meet any of the
      following criteria: (i) disinterested directors as defined in Section
      1715(e) of the Pennsylvania Business Corporations Law of 1988, as amended;
      (ii) persons who are not "interested" directors as defined in Section 1.23
      of The American Law Institute "Principles of Corporate Governance:
      Analysis and Recommendations" (1994); or (iii) persons who qualify as
      members of the Audit Committee pursuant to Section 303.00 of the New York
      Stock Exchange's Listed Company Manual.

      Michael Warehime filed an appeal from the denial of his motion to enjoin
      the previously described Amendment to the Company's Amended and Restated
      Articles. On December 2, 1998, a majority panel of the Superior Court of
      Pennsylvania issued a decision holding that although John Warehime had
      acted in good faith in voting for the Amendment to the Amended and
      Restated Articles as trustee of the Warehime voting trust, Mr. Warehime
      breached his fiduciary duty to the beneficiaries of the Warehime voting
      trust in voting for the Amendment. On November 29, 1999, the Supreme Court
      of Pennsylvania granted a petition for allowance of appeal, filed by John
      Warehime, and granted a cross-petition for appeal filed by Michael
      Warehime.

      On August 13, 1999, Michael Warehime filed a complaint in equity in the
      Court of Common Pleas of York County, Pennsylvania, naming as defendants
      Arthur S. Schaier, Cyril T. Noel, Clayton J. Rohrbach, Jr., John A.
      Warehime, and the Company. The complaint sought a court order declaring
      that the September 1999 election for the board of directors of the Company
      be conducted in accordance with the Articles of Incorporation of the
      Company as they existed prior to June 25, 1997, an order declaring that
      the Series C Convertible Preferred Stock cannot be voted, and an order
      that the following candidates for the board of directors of the Company
      proposed by Michael Warehime, Sally Yelland, Elizabeth Stick and J.
      William Warehime be accepted by the Company and listed on the ballot to be
      distributed at the annual meeting of shareholders of the Company to be
      held on September 16, 1999: Michael Warehime, Daniel Meckley, Elizabeth
      Stick, Sonny Bowman, and John Denton. The basis for the complaint was the
      December 2, 1998 decision of the Pennsylvania Superior Court which held
      that John A. Warehime breached his fiduciary duties in voting for the
      Amended and Restated Articles as trustee of the Warehime voting trust. The
      requested relief was denied by the Court of Common Pleas of York County
      and Michael Warehime appealed to the Superior Court of Pennsylvania.


                                       15
<PAGE>
                         PART I - FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


      On September 12, 2000, the Superior Court of Pennsylvania stated, in a
      Memorandum decision, that the June 25, 1997 shareholder vote, which
      adopted the Amended and Restated Articles of Incorporation of the
      Corporation should be set aside, and remanded the case to the Court of
      Common Pleas of York County to determine what further relief would be
      appropriate. On remand, the Court of Common Pleas of York County entered
      an Order on October 10, 2000 declaring that the Amended and Restated
      Articles of Incorporation were set aside and that an election should be
      held without the Amended or Restated Articles of Incorporation. On October
      11, 2000, the Supreme Court of Pennsylvania entered an Order staying the
      Order of the Court of Common Pleas of York County.

      On November 27, 2000, the Supreme Court of Pennsylvania reversed and
      remanded the Order of the Superior Court issued on December 2, 1998 and,
      in effect, the Order of the Superior Court issued September 12, 2000. In
      reversing the Superior Court's Order, the Supreme Court of Pennsylvania
      held that John A. Warehime, the trustee of the voting trust, did not
      breach his fiduciary duties in voting the trust shares in favor of the
      Amended and Restated Articles of Incorporation. The Supreme Court remanded
      the case to the Pennsylvania Superior Court to consider other issues
      raised by Michael A. Warehime.

      On May 4, 2001, the Superior Court of Pennsylvania, on remand from the
      Pennsylvania Supreme Court to decide several remaining issues, held that
      the 1997 amendments to the Corporation's Amended and Restated Articles of
      Incorporation "violated principles of corporate democracy" and should be
      invalidated even though the Superior Court found the directors acted in
      good faith and their actions in approving the amendments did not result in
      a breach of their fiduciary duties. A petition for allocatur was filed
      with the Pennsylvania Supreme Court requesting that the Pennsylvania
      Supreme Court review the Superior Court's May 4, 2001 ruling.

      The Corporation is involved in various other claims and legal actions
      arising in the ordinary course of business. In the opinion of management,
      the ultimate disposition of these matters will not have a material adverse
      effect on the Corporation's consolidated financial position, results of
      operations or liquidity.


                                       16
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                 Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES

FORWARD LOOKING STATEMENTS

When used in this Annual Report, the words or phrases "will likely result", "are
expected to", "will continue", "is anticipated", "estimate", "projected", or
similar expressions are intended to identify "forward looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to certain risks and uncertainties, including but not
limited to quarterly fluctuations in operating results, competition, state and
federal regulations, environmental considerations, and foreign operations. Such
factors, which are discussed in the Form 10-Q, could affect the Company's
financial performance and could cause the Company's actual result for future
periods to differ materially from any opinion or statements expressed herein
with respect to future periods. As a result, the Company wishes to caution
readers not to place undue reliance on any such forward looking statements,
which speak only as of the date made.

The following comments should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations
appearing in the Corporation's Annual Report on Form 10-K for the fiscal year
ended June 3, 2001.

GENERAL

Prices for processed food tend to rise with overall inflation and not in line
with prices of raw farm products. Generally, price surges in farm products due
to supply shocks and crop problems are not passed on to consumers dollar for
dollar. Management believes consumers often switch from one food product that
has risen to another which has not changed in price. As a result, food
processors tend to absorb raw farm product price increases to remain
competitive. However, when raw farm product prices drop, food processors try to
retain some of the savings. The Corporation does not expect the overall number
of pounds of product consumed to significantly increase over the next several
years. Generally, the Corporation expects sales growth by processors beyond
expected inflation rates and population growth will come at the expense of and
loss of market share by another processor. Sales growth can increase
internationally and through promotions to increase consumption through the
introduction of new or improved food products.


                                       17
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                 Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS

NET SALES

Consolidated net sales were $150.5 million for the twenty-six week period ended
December 2, 2001. This represents a decrease of .7% over the twenty-six week
period ended November 26, 2000 consolidated net sales of $151.6 million.
Consolidated net sales were $87.1 million for the thirteen-week period ended
December 2, 2001, a .6% increase from consolidated net sales of $86.6 million
for the corresponding period in the prior year. The decrease in consolidated net
sales for the twenty-six week period was due to decreased branded retail sales.
This decrease was partially offset by increases in food service sales, private
label and industrial sales. The increase in consolidated net sales for the
thirteen-week period was due to increases in food service, private lake and
industrial sales partially offset by decreases in branded retail sales.

COST OF GOODS SOLD

Cost of goods sold were $114.9 million, or 76.3% of consolidated net sales in
the twenty-six week period ended December 2, 2001 and $113.4 million, or 74.8%
of consolidated net sales for the corresponding period in 2000. Cost of goods
sold was $65.5 million, or 75.2% of consolidated net sales for the thirteen-week
period ended December 2, 2001 as compared to $64.1 million or 74.0% of
consolidated net sales for the corresponding period in 2000. The increase in
cost of goods sold as a percentage of net sales resulted primarily from a
reduction in branded retail sales and increased raw material costs. The
increases were partially offset by increases in food service sales, private
label sales and industrial sales, but at a lower gross profit.

SELLING EXPENSES

Selling expenses were $19.6 million, or 13.0% of consolidated net sales for the
twenty-six period ended December 2, 2001 as compared to $22.8 million or 15.0%
of consolidated net sales for the corresponding period in 2000. Selling expenses
were $11.7 million or 13.4% of consolidated net sales for the thirteen-week
period ended December 2, 2001 compared to $13.2 million, or 15.3% of
consolidated net sales during the corresponding period in 2000. The decreases in
selling expense reflects lower planned promotional expenses against branded
sales for both the twenty-six and the thirteen week periods.

ADMINISTRATIVE EXPENSES

Administrative expenses as a percentage of consolidated net sales were 3.9% for
the twenty-six week period ended December 2, 2001 and 3.7% for the corresponding
period in 2000. Administrative expenses as a percentage of consolidated net
sales were 3.2% for the thirteen


                                       18
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                 Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES


week period ended December 2, 2001 compared to 3.2% of consolidated net sales
during the corresponding period in 2000. The increase in administrative expenses
reflects general annual wage increases partially offset by decreases in
corporate outside legal fees during the thirteen week period ended December 2,
2001.

INTEREST EXPENSE

Interest expense was $1.9 million for the twenty-six week period ended December
2, 2001 as compared to $2.4 million for the same period in 2000. Interest
expense was $1.0 million for the thirteen-week period ended December 2, 2001
compared to $1.3 million for the same period in 2000. The decreases in interest
is due to lower average cost of funds during the current fiscal year.

OTHER EXPENSES

Other expenses, net was $465,000 for the twenty-six week period ended December
2, 2001 as compared to $406,000 for the same period in 2000. Other expenses, net
was $262,000 for the thirteen-week period ended December 22, 2001 as compared to
$170,000 for the same period in 2000. The increase in other expenses for the
twenty-six week period primarily resulted from lower gains on the sale of
investments that occurred during the quarter ended December 2, 2001.

INCOME TAXES

The provision for corporate federal and state income taxes for the twenty-six
week period ended December 2, 2001 was $2.5 million, or 32.3% of pre-tax
earnings, as compared to $2.6 million, or 36.8% of pre-tax earnings for the same
period in 2000. The provision for income taxes was 34.0% of pre-tax earnings for
the thirteen-week period ended December 2, 2001 as compared to 36.1% for the
same period in 2000. The decrease in the effective tax rate is primarily due to
increased earnings, which were not subject to income taxes, in foreign
jurisdictions in the current period as compared to the prior period.

LIQUIDITY AND CAPITAL RESOURCES

Management's discussion of the Corporation's financial condition should be read
in conjunction with the condensed consolidated statements of cash flows
appearing on page 7 of this report.

OPERATING ACTIVITIES

Net working capital was $34.7 million at December 2, 2001 and $6.8 million at
June 3, 2001. The current ratios were 1.42 on December 2, 2001 and 1.08 on June
3, 2001.


                                       19
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                 Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES

Cash used in operating activities for the twenty-six period ended December 2,
2001 was $.2 million as compared to cash used in operating activities of $1.7
million during the same period of 2000. The combination of increased earnings,
increased accounts payable and accrued expenses offset by increased inventory
levels and increased accounts receivable utilized less cash flow in the
twenty-six week period ended December 2, 2001 compared to the prior year period.

INVESTING ACTIVITIES

During the twenty-six week period ended December 2, 2001, the Corporation spent
approximately $3.7 million for plant upgrades and expansions. This compares to
$5.2 million spent during the same period last year for capital projects.

FINANCING ACTIVITIES

The decrease in notes payable of approximately $17.5 million during the
twenty-six week period ended December 2, 2001 represents borrowings of $7.5
million made against available season lines of credit from financial
institutions for use in operations and the payment of $25.0 million on September
1, 2001 from proceeds from a senior note agreement with John Hancock Financial
Services which bears interest of 7.01% per year and is repayable 10 annual
installments beginning September 15, 2002.

The Corporation has available seasonal lines of credit from financial
institutions in the amount of $45.0 million, of which $34.8 million was utilized
as of December 2, 2001. Additional borrowing is permitted within prescribed
parameters in existing debt agreements, which contain certain performance
covenants.

The Company believes that it has sufficient working capital and availability
from seasonal lines of credit to meet its cash flow needs.


                                       20
<PAGE>
                           PART II - OTHER INFORMATION
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES


ITEM 1. LEGAL PROCEEDINGS

See Note 7 of the Notes to Consolidated Financial Statements in this Form 10-Q
for information regarding the 1995 Warehime Family Litigation, the Derivative
Action and the 1997 Injunction Proceeding.

The Corporation is involved in various other claims and legal actions arising in
the ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Corporation's consolidated financial position, results of operations or
liquidity.

ITEM 2. CHANGES IN SECURITIES -- None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None

ITEM 5. OTHER INFORMATION -- None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Exhibits - None

      (b)   Reports on Form 8-K

            No reports on Form 8-K were filed during the quarter ended December
            2, 2001.


                                       21
<PAGE>
                                    SIGNATURE



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


                                        HANOVER FOODS CORPORATION


Date:   January 16, 2002                By:  /s/ Gary T. Knisely
                                             -----------------------------------
                                             Gary T. Knisely
                                             Executive Vice President


                                        By:  /s/ Pietro Giraffa
                                             -----------------------------------
                                             Pietro Giraffa
                                             Controller


                                       22