**UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-Q**

|        | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934  |
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|   | For the Quarterly Period Ended August 31, 2003                                           |
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|   | OR                                                                                       |
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|        | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

Commission File Number – 0-17896          

| **HANOVER FOODS CORPORATION**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (Exact name of Registrant as specified in its charter) Commonwealth of Pennsylvania  23-0670710    (State or other jurisdiction ofincorporation or organization)  (I.R.S. Employer 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               No     

Indicate the number of shares outstanding of issuer’s classes of common stock as of the latest practicable date.
ClassOutstanding at August 31, 2003  Class A Common Stock, $25 par value288,062 shares  Class B Common Stock, $25 par value582,198 shares
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**HANOVER FOODS CORPORATION AND SUBSIDIARIESFORM 10-QFor the Thirteen Weeks Ended August 31, 2003**
Index             Page    Part I – Financial Information      Item 1 – Financial Statements:       Condensed Consolidated    Balance Sheets      August 31, 2003 (Unaudited) and June 1, 2003 3      Condensed Consolidated    Statements of Operations (Unaudited)      Thirteen Weeks Ended August 31, 2003      and September 1, 2002 5      Condensed      Consolidated Statements of Stockholders’      Equity, (Unaudited) Thirteen Weeks Ended August    31, 2003 6      Condensed Consolidated    Statements of Cash Flows      (Unaudited), Thirteen Weeks Ended August 31,      2003      and September 1, 2002 7      Notes to Condensed    Consolidated Financial Statements      (Unaudited) 8     Item      2 – Management’s Discussion and Analysis of Financial               Condition and Results of Operations19     Item      3 – Quantitative    and Qualitative Disclosure About Market Risk 23     Item      4 – Controls    and Procedures 23     Part II – Other    Information 24     Item      1 – Legal    Proceedings 24 Item      2 – Changes    in Securities 24 Item      3 – Defaults    upon Senior Securities 24 Item      4 – Submission    of Matters to a Vote of Security Holders 24 Item      5 – Other    Information 24 Item      6 – Exhibits    and Reports on Form 8-K 24     Exhibit 31.1 Section    302 Certification – Chief    Executive Officer      Exhibit 31.2 Section    302 Certification – Chief    Financial Officer      Exhibit 32.1 Certification by John A. Warehime, Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002     Exhibit 32.2 Certification by Gary T. Knisely, Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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**PART I  –  FINANCIAL INFORMATIONItem 1.  Financial StatementsHANOVER FOODS CORPORATION AND SUBSIDIARIESCondensed Consolidated Balance Sheets**
     **August 31, 2003**  **June 1, 2003** **ASSETS****                Current Assets:        Cash and Cash Equivalents $3,101,000 $  4,128,000  Accounts and Notes Receivable, Net  26,422,000  25,099,000  Accounts Receivable from Related Parties, Net  214,000  163,000  Inventories                Finished Goods  49,894,000  40,746,000          Raw Materials and Supplies  16,932,000  17,562,000  Prepaid Expenses  2,179,000  2,216,000  Deferred Income Taxes  917,000  917,000           Total Current Assets  99,659,000  90,831,000           Property, Plant and Equipment, at Cost:        Land and Buildings  54,493,000  53,972,000  Machinery and Equipment  129,562,000  128,422,000  Leasehold Improvements  544,000  544,000      184,599,000  182,938,000  Less Accumulated Depreciation and             Amortization  113,558,000  111,255,000      71,041,000  71,683,000  Construction in Progress  1,608,000  951,000           Total Property, Plant and Equipment  72,649,000  72,634,000  Other Assets:       Goodwill & Intangible Assets – Less Accumulated  3,539,000  3,539,000  Amortization of $3,175,000         Other Assets  5,463,000  4,429,000  Total Assets $181,310,000 $171,433,000  See accompanying notes to condensed consolidated financial statements. 
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**PART  I  –  FINANCIAL INFORMATIONItem 1.  Financial Statements, ContinuedHANOVER FOODS CORPORATION AND SUBSIDIARIESCondensed Consolidated Balance Sheets**
 LIABILITIES AND STOCKHOLDERS’ EQUITY  **August 31,      2003**  **June 1, 2003**  Current Liabilities:               Notes Payable – Banks $16,161,000   $  7,634,000         Accounts Payable  21,075,000  19,745,000         Accounts Payable to Related Parties, Net  4,000  7,000         Accrued Expenses  10,290,000  10,921,000         Current Maturities of Long-Term Debt  4,286,000  4,286,000         Income Taxes Payable  0  1,211,000  Total Current Liabilities  51,816,000  43,804,000  Long-Term Debt, Less Current Maturities  25,357,000  25,357,000 Other Liabilities  6,261,000  5,916,000 Deferred Income Taxes  3,019,000  3,139,000  Total Liabilities  86,453,000  78,216,000  Stockholders’ Equity:               Series A & B 8 1/4% cumulative convertible preferred, $25                   Par Value, 120,000 shares authorized;                   31,056 shares issued at June 1, 2003 and August 31, 2003;                   14,564 shares outstanding at June 1, 2003 and                    August 31, 2003  776,000  776,000         Series C 4.4% 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, 349,353 shares issued                   at June 1, 2003 and August 31, 2003; 288,062 shares                   outstanding at June 1, 2003 and August 31, 2003  8,733,000  8,733,000         Common stock, Class B, voting, $25 Par Value;                    880,000 shares authorized, 649,072 shares issued                    at June 1, 2003 and August 31, 2003; 435,268 shares                   outstanding June 1, 2003 and August 31, 2003  16,227,000  16,227,000         Capital Paid in Excess of Par Value  16,372,000  16,372,000         Retained Earnings  78,352,000  76,746,000         Treasury Stock, at Cost  (8,172,000) (8,172,000)        Value of Shares held in Employee Stock Trust – 146,930 shares                   at June 1, 2003 and August 31, 2003  (17,096,000) (17,096,000)        Accumulated Other Comprehensive Loss  (585,000) (619,000) Total Stockholders’ Equity  94,857,000  93,217,000  Total Liabilities and Stockholders’ Equity $181,310,000  171,433,000  See accompanying notes to condensed consolidated financial statements. 
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**PART I  –  FINANCIAL INFORMATIONItem 1.  Financial Statements, ContinuedHANOVER FOODS CORPORATION AND SUBSIDIARIESCondensed Consolidated Statements of Operations – Unaudited**
     **THIRTEEN WEEKS ENDED**     **August 31, 2003**  **September 1, 2002**           Net Sales $66,900,000 $63,427,000 Cost of Goods Sold  57,261,000  53,087,000  Gross Profit  9,639,000  10,340,000          Selling Expenses  2,906,000  2,928,000 Administrative Expenses  3,732,000  3,732,000  Operating Profit  3,001,000  3,680,000          Interest Expense  594,000  744,000          Other (Income) Loss, Net  (223,000) 176,000  Earnings Before Income Taxes  2,630,000  2,760,000          Income Taxes  818,000  978,000  Net Earnings   1,812,000  1,782,000 Dividends on Preferred Stock  10,000  10,000  Net Earnings Applicable to        Common Stock $1,802,000 $1,772,000  Earnings Per Share:        Net Earnings Per Common                Share – Basic  2.49  2.47  Net Earnings Per Common                Share – Diluted  2.46  2.43 Dividends per Share, Common  0.275  0.275 Basic Weighted Average Shares  723,330  718,791 Diluted Weighted Average Shares  736,396  731,857  See accompanying notes to condensed consolidated financial statements. 
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**PART I  –  FINANCIAL INFORMATIONItem 1.  Financial Statements, ContinuedHANOVER FOODS CORPORATION AND SUBSIDIARIESCondensed Consolidated Statements of Stockholders’ Equity(Unaudited)**
   TotalStockholder’sEquity  CumulativeConvertiblePreferred StockSeries A & BShares  Amount  CumulativeConvertiblePreferred StockSeries CShares  Amount  CommonStockClass AShares  Amount  CommonStockClass BShares  Amount  CapitalPaid InExcessOf ParValue  RetainedEarnings  TreasuryStockShares  Amount  Employee Stock TrustShares  Amount  AccumulatedOtherComprehensiveIncome Balance, June 1, 2003 $93,217,000       31,056 $776,000       10,000 $250,000       349,353 $8,733,000       649,072 $16,227,000 $16,372,000 $76,746,000       144,657       ($8,172,000)       146,930       ($17,096,000)       ($619,000)                                                   Net Earnings for the Period $1,812,000                            $1,812,000                Cash Dividends  Per Share:                                                    Preferred – $2.0625 annually ($      10,000)                            ($      10,000)                  Common – $1.10 annually ($      196,000)                            ($      196,000)                Issuance of common stock to                                                    Employee Stock Trust                                                    Class B 138,191 shares $0                                              Redemption of Common Stock                                                    Class A                                                    Class B $0                                              Stock Conversions $0                                              Other Comprehensive Income $34,000                                           $34,000                                                   Balance August 31, 2003 $94,857,000       31,056 $776,000       10,000 $250,000       349,353 $8,733,000       649,072 $16,227,000 $16,372,000 $78,352,000       144,657       ($8,172,000)       146,930       ($17,096,000)       ($585,000) 
See accompanying notes to condensed consolidated financial statements.

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**PART I  –  FINANCIAL INFORMATION  Item 1.  Financial Statements, ContinuedHANOVER FOODS CORPORATION AND SUBSIDIARIESCondensed Consolidated Statements of Cash Flows (Unaudited)**
       **Thirteen Weeks Ended**       **August 31, 2003**  **Sept. 1, 2002**  Cash Flows From:       Operating Activities:        Net Earnings $1,812,000 $1,782,000  Adjustments to Reconcile Net Earnings:         To Net Cash Used In Operating Activities:          Depreciation and Amortization  2,303,000  2,431,000    Deferred Income Taxes  (120,000) 284,000  Changes in Assets and Liabilities:          Accounts Receivable  (1,374,000) (370,000)   Inventories  (8,518,000) (9,119,000)   Prepaid Expenses  37,000  259,000    Accounts Payable and Accrued Expenses  696,000  3,847,000    Income Taxes Payable  (1,211,000) 164,000    Other Liabilities  345,000  293,000  Net Cash (Used In) Operating Activities  (6,030,000) (429,000) Investing Activities:        Decrease (Increase) in Other Assets  (1,000,000) (281,000) Acquisitions of Property, Plant and Equipment  (2,318,000) (1,600,000) Net Cash (Used In) Investing Activities  (3,318,000) (1,881,000) Financing Activities:        Increase in Notes Payable  8,527,000  3,867,000  Payments on Long-Term Debt  0  (3,000) Payment of Dividends  (207,000) (249,000) Net Cash Provided by Financing Activities  8,320,000  3,615,000  Net Increase (Decrease) in Cash and Cash Equivalents  (1,027,000) 1,305,000 Cash and Cash Equivalents, Beginning of Period  4,128,000  2,816,000  Cash and Cash Equivalents, End of Period $3,101,000 $4,121,000  See accompanying notes to condensed consolidated financial statements. 
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**PART I – FINANCIAL INFORMATIONItem 1.  Financial Statements, ContinuedHANOVER FOODS CORPORATION AND SUBSIDIARIESNotes to Condensed Consolidated Financial StatementsAugust 31, 2003(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 periods ended August 31, 2003 and September 1, 2002.

It is suggested that these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Form 10-K/A for the Corporation’s fiscal year ended June 1, 2003.

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.

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

Certain amounts in prior periods have been reclassified to conform with classification made in the current year.

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**PART I – FINANCIAL INFORMATIONItem 1.  Financial Statements, ContinuedHANOVER FOODS CORPORATION AND SUBSIDIARIESNotes to Condensed Consolidated Financial StatementsAugust 31, 2003 (Unaudited)**
(2)SHORT-TERM BORROWINGS
The Corporation and its subsidiaries maintain short-term unsecured lines of credit with various banks providing credit availability amounting to $50,000,000 of which $16,161,000 was borrowed at August 31, 2003.  The average cost of funds during thirteen week period ended August 31, 2003 was 1.91% compared to 2.55% for the thirteen week period ended September 1, 2002.
(3)LONG-TERM DEBT
The long-term debt of the Corporation and its subsidiaries consist of:
    **August 31, 2003**  **June 1, 2003**  8.74% unsecured senior notes payable        to an insurance company, duethrough 2007 $7,143,000 $7,143,000           7.01% unsecured senior notes payable        to an insurance company, due through 2011  22,500,000  22,500,000           Total Long-Term Debt  29,643,000  29,643,000          Less current maturities  4,286,000  4,286,000   Net Long-Term Debt $25,357,000 $25,357,000  
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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 of August 31, 2003.

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**PART I – FINANCIAL INFORMATIONItem 1.  Financial Statements, ContinuedHANOVER FOODS CORPORATION AND SUBSIDIARIESNotes 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.   Transactions with related parties are summarized below:
   **Thirteen Weeks Ended**     ** **  ** **     **August 31, 2003**  **September 1, 2002**           **Revenues:**                 Park 100 Foods, Inc. $338,000 $292,000          **Expenditures:**                 Park 100 Foods, Corp.         11,000       3,000  Warehime Enterprises, Inc.           1,000        1,000  John A. & Patricia M. Warehime           9,000      17,000  Lippy Brothers, Inc.       155,000            242,000  Schaier Travel, Inc.                  0          3,000  
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**PART I – FINANCIAL INFORMATIONItem 1.  Financial Statements, ContinuedHANOVER FOODS CORPORATION AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)**
 The respective August 31, 2003 and June 1, 2003 account balances with related parties are as follows:                       **August 31, 2003**  **June 1, 2003**  **Accounts Receivable:**                 Park 100 Foods, Inc. $  214,000 $163,000                    **Accounts Payable:**                 Park 100 Foods $        0 $7,000  John & Patricia Warehime  3,000  0  Warehime Enterprises, Inc.  1,000  0 
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**PART I – FINANCIAL INFORMATIONItem 1.  Financial Statements, ContinuedHANOVER FOODS CORPORATION AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)**
(5)COMPREHENSIVE INCOME
Comprehensive income is determined as follows:           
    **13 Weeks Ended**     **August 31, 2003**  **September 1, 2002**           Net Income $1,812,000 $1,782,000           Other Comprehensive Income (Loss)        Unrealized Gain (Loss) on Investments  34,000  (143,000)               Comprehensive Income $1,846,000 $1,639,000      (6)RECONCILIATION OF NUMERATOR AND DENOMINATOR FOR BASICAND DILUTED EARNINGS PER SHARE    **13 Weeks Ended**     **August 31, 2003**  **September 1, 2002**          Numerator for basic earnings per share:       Net earnings applicable to         common stock $1,802,000 $1,772,000          Preferred stock dividends  10,000  10,000      Net earnings assuming dilution $1,812,000 $1,782,000      Denominator:       Basic weighted average shares  723,330  718,791          Effect of dilutive securities  13,066  13,066      Diluted weighted average shares  736,396  731,857     
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**PART I – FINANCIAL INFORMATIONItem 1.  Financial Statements, ContinuedHANOVER FOODS CORPORATION AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)**
(7)STOCK OPTION PLAN 
On       June 20, 2002, the Corporation’s Board of Directors adopted the Hanover Foods Corporation 2002 Stock Option Plan (the “Stock Option Plan”). Stock options are accounted for under Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” and related interpretations.  Accordingly, no compensation expense is recorded for stock option grants.  

Had compensation expense for all stock and employee stock purchase plans been determined based upon the fair value at the grant date for awards under these plans consistent with the methodology prescribed under SFAS No. 123, “Accounting for Stock-Based Compensation,” as amended, our net (loss) income and (loss) earnings per share would have been adjusted to the pro forma amounts as follows:
In thousands, except (per share date)          **Thirteen Weeks Ended**    **August 31, 2003**  **September 1, 2002** 2002        Net Income – as    reported  $1,812,000 $1,782,000  Deduct: Total stock-based employee   compensation expense determined under fair   value based method for all awards, net of related   tax effects   20,000  20,000  Pro forma net income  1,792,000  1,762,000 Earnings per share:Basic-as reported        Basic – pro forma  2.492.48  2.472.43 Diluted – as    reported  2.46  2.43 Diluted – pro    forma  2.43  2.39  
Since the determination of fair value of all stock options granted includes variable factors, including volatility, and additional stock option grants are expected to be made each year, the above pro forma disclosures are not representative of pro forma effect on reported net income and earnings per shares for future years.

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**PART I – FINANCIAL INFORMATIONItem 1.  Financial Statements, ContinuedHANOVER FOODS CORPORATION AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)**
(9)LEGAL MATTERS
**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.  OnNovember 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 on 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.  On May 17, 2002, the Court entered an order denying defendants’ Motion to Dismiss.

On May 14, 2002, Albert Blakey, Esquire, counsel for certain of the derivative plaintiffs filed a petition for fees seeking an award of $1,585,716 in attorney’s fees.  Defendants filed a response in opposition to the request for fees.  

On January 29, 2003, Albert Blakey, Esquire, counsel for certain derivative plaintiffs filed a Motion for Reconsideration of the Court’s December 31, 2002 denial of the Petition for Fees.  A Response in Opposition to the Motion for Reconsideration of Plantiff’s Petition for Fees was filed with the Court on February 12, 2003.

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**Warehime Family Litigation**

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 whoparticipate 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 directors 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 created a Series C Convertible Preferred Stock , which, in case of a dispute among the above mentioned members of the Warehime family on Board of Directors composition or other important matters, would be entitled to 35 votes per shares (a total of 350,000 votes based on 10, 000 shares of Series C Convertible Preferred Stock issued to and held by the trustees of the Corporation’s 401(k) Savings Plan); if Series C Convertible Preferred Stock were entitled to vote because of such dispute, each share of Class  A Common Stock would be entitled to 1/10th of a vote per share.

The Amended and Restated Articles also classified the terms of the Board of Directors commencing with the election at the 1997 annual shareholders’ meeting and permitted directors to be elected for four-year term as permitted by Pennsylvania law.  Pursuant to the Corporation’s Bylaws, as then in effect, nominations for directors must be submitted to the Corporation in the manner prescribed by the Bylaws no later than June 1 of the year in which the meeting is to occur.

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 certain directors of the Corporation in the Court of Common Pleas of York County, Pennsylvania against a Proposal of the Board of  Directors to amend and restate the Corporation’s Articles of Incorporation in the manner hereafter described.

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”) to the 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.  

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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 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 a person who, in the opinion of counsel for the Corporation, meets 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 A. 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 A. Warehime had acted in good faith in voting for the Amendment to the Amended and Restated Articles as trustee of the Warehime voting trust, he had 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 A. Warehime, and granted a cross-petition for appeal filed by Michael A. Warehime.

On August 13, 1999, Michael A. 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 A. Warehime, Sally Yelland, Elizabeth Stick and J. William Warehime be accepted by theCompany 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 A. Warehime, Daniel Meckley, Elizabeth Stick, Sonny Bowman, and John Denton.  The basis for the complaint was the December 2, 1998 decision of the Superior Court of Pennsylvania 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.

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 ofYork 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 Superior Court of Pennsylvania to consider other issues raised by Michael A. Warehime.  On May 4, 2001, the Superior Court of Pennsylvania, on remand from the Supreme Court of Pennsylvania to decide several remaining issues, held that the 1997 amendments tothe 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  Supreme Court of Pennsylvania requesting that the Supreme Court of Pennsylvania review the Superior Court’s May 4, 2001 ruling.  On September 17, 2002, the Supreme Court of Pennsylvania granted the petition for allocutur and oral argument was heard in the matter on May 13, 2003.

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On December 12, 2002,  Michael Warehime filed a Motion for Relief under the Warehime v. Schaier caption in the York County Court of Common Pleas.  Michael Warehime’s motion requested, interalia, that Hanover Foods Corporation’s December 23, 2002 election be conducted according to the Articles of Incorporation as they existed prior to June 25, 1997.  Following a hearing on December 20, 2002, the York County Court of Common Pleas denied Michael Warehime’s Motion for Relief.  On January 17, 2003 Michael Warehime appealed the Court’s denial of his Motion for Relief to the Superior Court of Pennsylvania.

On December 12, 2002, Michael Warehime filed an Emergency Application for Expedited Relief  with the Pennsylvania Supreme Court in the Warehime v. Warehime  appeal concerning the election of director noticed for December 23, 2002.  The Pennsylvania Supreme Court denied Michael Warehime’s emergency application on December 20, 2002.

In addition, 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.

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**PART I – FINANCIAL INFORMATIONItem 2.  Management’s Discussion and Analysis ofFinancial Condition and Results of OperationsHANOVER 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 regulation, 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 theCompany’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/A for the fiscal year ended June 1, 2003

**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 material supply reductions 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 salesgrowth 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.

**RESULTS OF OPERATIONSNET SALES**

Consolidated net sales were $66.9 million for the thirteen week period ended August 31, 2003.  This represents an increase of 5.5% over the thirteen week period ended September 1, 2002 consolidated net sales of $63.4 million.  The increase of $3.5 million was primarily due to increased sales of refrigerated foods as well as snacks, private label, canned mushrooms and branded retail partially offset by decreases in food service and industrial canned and frozen sales.

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**PART I – FINANCIAL INFORMATIONItem 2.  Management’s Discussion and Analysis ofFinancial Condition and Results of OperationsHANOVER FOODS CORPORATION AND SUBSIDIARIES**

**COST OF GOODS SOLD**

Cost of good sold were $57.3 million, or 85.6% of consolidated net sales in the thirteen week period ended August 31, 2003 and $53.1 million or 83.7% of consolidated net sales for the corresponding period in 2002.  The increase in cost of goods sold as a percentage of net sales resulted primarily from the increases in refrigerated food sales and private label snack sales at a higher cost of sales percentage as compared to other sales of the company as well as higher energy and health care costs without a corresponding increase in prices due to competitive pressures.

**SELLING EXPENSES**

Selling expenses were $2.9 million, or 4.3% of consolidated net sales for the thirteen week period ended August 31, 2003 as compared to $2.9 million or 4.6% of consolidated net sales for the corresponding period in 2002.  The dollar selling expense were consistent with the last fiscal period as the company held the line on expenses while increasing net sales by 5.5%.

**ADMINISTRATIVE EXPENSES**

Administrative expenses were $3.7 million, or 5.6% of consolidated net sales for the thirteen week period ended August 31, 2003 as compared to $3.7 million, or 5.9% of consolidated net sales for the corresponding period in 2002.  Administrative expense dollars were consistent with the last fiscal year period with increases in the provision for supplemental pension benefits off-set by decreases in the insurance reserves at Hanover Insurance Company Limited a wholly-owned subsidiary of Hanover Foods Corporation.

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**PART I – FINANCIAL INFORMATIONItem 2.  Management’s Discussion and Analysis ofFinancial Condition and Results of OperationsHANOVER FOODS CORPORATION AND SUBSIDIARIES**

**INTEREST EXPENSE**

Interest expense was $.6 million for the thirteen week period ended August 31, 2003 as compared to $.7 million for the same period in 2002.  The decrease reflects lower average borrowings as well as lower average borrowing rates for the period compared to 2002.

**OTHER EXPENSES (INCOME) NET**

Other income was $.2 million for the thirteen week period ended August 31, 2003 as compared to other expense of $.2 million for the same period in 2002.  The decrease in other expenses is primarily due to a smaller foreign translation adjustment loss.  Other income was also generated from the sale of investments.

**INCOME TAXES**

The provision for corporate federal and state income taxes for the thirteen week period ended August 31, 2003 was $818,000, or 31.1% of pretax earnings, as compared to $978,000, or 35.4% of pre-tax earnings for the same period in 2002.  The decrease in the effective tax rate is primarily due to increased earnings in jurisdictions with lower effective tax rates in the current  period as compared to the prior period.

**LIQUIDITY AND CAPITAL RESOURCES**

The discussion and analysis of the Corporation’s liquidity and capital resources should be read in conjunction with the Consolidated Statements of Cash Flows, contained elsewhere herein.

**OPERATING ACTIVITIES**

Net working capital was $47.8 million at August 31, 2003 and $47.0 million at June 1, 2003.  The current ratios were 1.92 on August 31, 2003 and 2.07 on June 1, 2003.

Cash used in operating activities for the thirteen week period ended August 31, 2003 was $6.0 million as compared to cash used in operating activities of $.4 million during the same period of 2002. The uses of cash during the thirteen week period consisted primarily of an increase in finished goods inventory and an increase in accounts and notes receivable, partially offset by sources of cash attributed to earnings and a decrease in prepaid expenses.

**INVESTING ACTIVITIES**

During the thirteen week period ended August 31, 2003, the Corporation spent approximately $2.3 million for the purchase plant upgrades and expansions.  This compares to $1.6 million spent during the same period last year for capital projects. During the thirteen week period the market value of investments increased $.5 million compared to the same period last fiscal year.

**FINANCING ACTIVITIES**

The increase in notes payable of approximately $8.5 million during the thirteen week period ended August 31, 2003 represents borrowings made against available seasonal lines of credit from financial institutions for use in operations and plant upgrades and expansions.

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**PART I – FINANCIAL INFORMATIONItem 2.  Management’s Discussion and Analysis ofFinancial Condition and Results of OperationsHANOVER FOODS CORPORATION AND SUBSIDIARIES**

The Corporation has available seasonal lines of credit from financial institutions in the amount of $50.0 million, of which $16.2 million was utilized as of August 31, 2003.  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.

The following table summarizes the Corporation’s contractual obligations and other commitments as of  August 31, 2003:
      **Payment Due by Period**      **Contractual Obligation**  **Total**  **1 Year**  **2-3 Years**  **4-5 Years**  **After5 Years**       Short-Term Notes Payables $16,161,000 $16,161,000 $-0- $-0- $-0- Long-Term Debt  29,643,000  4,286,000  8,572,000  6,785,000  10,000,000 Operating Leases  1,121,000  433,000  470,000  218,000  -0-        Total contractual obligations $46,925,000 $20,880,000 $9,042,000 $7,003,000 $10,000,000        
Currently, the Company is obligated to purchase 6,000,000 pounds of tomato paste from California Tomato Products, Colusa, California in each of the fiscal years from 2003 through 2006, at a price based on annual cost of production.  The current market price of tomato paste is 28¢/lb. FOB California.

The Company’s sources of liquidity are primarily funds from operation and available amounts under three (3) seasonal lines of credit. One line expires on October 29, 2003, the second line expires on October 31, 2003 and the third line expires on January 28, 2004. They are expected to be renewed in the ordinary course of business.

**NEW ACCOUNTING STANDARDS**

In May 2003, the FASB issued 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 measure certain financial instruments with characteristics of both liabilities and equity.  It requires that an issuer to classify a financial instrument within its scope as a liability (or an asset in some circumstances).  The statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003.  The statement is not expected to have a material impact on our consolidated financial statements.

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**PART I – FINANCIAL INFORMATIONItem 3.  Quantitative and Qualitative Disclosures About Market RiskHANOVER FOODS CORPORATION AND SUBSIDIARIES**

There are no material changes to the disclosures on this matter provided in the Company’s Annual Report on Form 10-K for the fiscal year ended June 1, 2003.

**PART I – FINANCIAL INFORMATIONItem 4. Controls and ProceduresHANOVER FOODS CORPORATION AND SUBSIDIARIES**

As of August 31, 2003, the Company’s    principal executive officer and principal financial officer concluded  that    the Company’s disclosure controls and    procedures were effective in timely alerting them to material information    required to be disclosed by the Company in the reports that it files with    the SEC under the Securities Exchange Act of 1934, as amended, during the    period that the report is being prepared. There were no significant changes    in the Company’s internal controls or in other factors that could significantly    affect those controls subsequent to the date of their evaluation. As a result,    no correctiveactions were taken.

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**PART II – OTHER INFORMATIONHANOVER FOODS CORPORATION AND SUBSID IARIES**

****ITEM 1.   LEGALPROCEEDINGS

See note 9 of the Notes of Condensed Consolidated Financial Statements in this form 10-Q for information regarding the 1995 Warehime Family Litigation and the Derivative Action.

****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.   EXHIBITSAND REPORTS ON FORM 8-K 

Exhibit 31.1 SECTION 302 CERTIFICATION – CHIEF    EXECUTIVEOFFICER

Exhibit 31.2 SECTION 302 CERTIFICATION – CHIEF    FINANCIALOFFICER

EXHIBIT 32.1 CERTIFICATION BY JOHN A. WAREHIME,    CHIEF EXECUTIVE OFFICER PURSUANT to SECTION 906 of the SARBANES-OXLEY ACTof 2002

EXHIBIT 32.2 CERTIFICATION BY GARY T. KNISELY,    CHIEF FINANCIAL OFFICER PURSUANT to SECTION 906 of the SARBANES-OXLEY ACT    of 2002

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**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:   October 15, 2003  By:  */s/ Pietro Giraffa*       —————————————       Pietro Giraffa       Vice President & Controller       *Chief Accounting Officer*       (Principal Accounting Officer)     By:  */s/ Gary T. Knisely*       —————————————       Gary T. Knisely       Executive Vice President       Chief Financial Officer 
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