<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

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

                 For the Quarterly Period Ended November 30, 1997

                                       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)

<TABLE>
<S>                                                                 <C>
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)
</TABLE>

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 November 30, 1997
                          -----                                --------------------------------
         <S>                                                           <C>
         Class A Common Stock, $25 par value                           291,572 shares
         Class B Common Stock, $25 par value                           426,985 shares
</TABLE>
<PAGE>   2
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES

                                   FORM 10-Q

                For the Twenty-Six Weeks Ended November 30, 1997


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

   Item 1 -- Financial Statements:

         Condensed Consolidated Balance Sheets
            November 30, 1997 (Unaudited) and June 1, 1997..........................   3

         Condensed Consolidated Statements of Operations
            (Unaudited), Thirteen Weeks and Twenty-Six Weeks Ended
            November 30, 1997 and December 1, 1996..................................    5

         Condensed Consolidated Statements of Stockholders'
            Equity (Unaudited), Periods Ended November 30, 1997
            and June 1, 1997........................................................    6

         Condensed Consolidated Statements of Cash Flows
            (Unaudited), Twenty-Six Weeks Ended November 30, 1997
            and December 1, 1996....................................................    7

         Notes to Condensed Consolidated Financial Statements

            (Unaudited).............................................................    8

   Item 2 -- Management's Discussion and Analysis of Financial

                  Condition and Results of Operations...............................   13

Part II -- Other Information........................................................   17

   Item 1 -- Legal Proceedings

   Items 2-5 -- None

   Item 6 -- Exhibits and Reports on Form 8-K......................................    23
</TABLE>
<PAGE>   3
                       PART I  --  FINANCIAL INFORMATION
                         Item 1.  Financial Statements
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
ASSETS                                               November 30, 1997        June 1, 1997
                                                         (Unaudited)                      
------------------------------------------------------------------------------------------
<S>                                                   <C>                  <C>
Current Assets:
   Cash and Short-Term Cash Investments               $    3,156,000       $    3,312,000
   Accounts and Notes Receivable, Net                     25,217,000           22,954,000
   Accounts Receivable from Related Parties, Net              61,000              890,000
   Inventories                                            58,018,000           41,424,000
   Prepaid Expenses                                        2,199,000            2,064,000
   Deferred Income Taxes                                     733,000              733,000 
------------------------------------------------------------------------------------------
Total Current Assets                                      89,384,000           71,377,000 
------------------------------------------------------------------------------------------
Property, Plant and Equipment, at Cost:
   Land and Buildings                                     34,043,000           33,398,000
   Machinery and Equipment                                83,909,000           82,037,000
   Leasehold Improvements                                    359,000              349,000 
------------------------------------------------------------------------------------------
                                                         118,311,000          115,784,000
   Less Accumulated Depreciation and
      Amortization                                        69,621,000           66,822,000 
------------------------------------------------------------------------------------------
                                                          48,690,000           48,962,000
   Construction in Progress                                  352,000              760,000 
------------------------------------------------------------------------------------------
Total Property, Plant and Equipment                       49,042,000           49,722,000 
------------------------------------------------------------------------------------------
Other Assets and Deferred Charges:
   Intangible Assets, Less Accumulated
      Amortization of $2,008,000 and
      $2,001,000                                             434,000              441,000
Other Assets                                               1,825,000            2,491,000 
------------------------------------------------------------------------------------------
Total Assets                                          $  140,685,000       $  124,031,000  
------------------------------------------------------------------------------------------
</TABLE>

     See accompanying notes to condensed consolidated financial statements.
                                       3
<PAGE>   4
                       PART  I  --  FINANCIAL INFORMATION
                         Item 1.  Financial Statements
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY                        November 30, 1997        June 1, 1997
                                                              (Unaudited)                        
-------------------------------------------------------------------------------------------------
<S>                                                           <C>                   <C>
Current Liabilities:
   Notes Payable - Banks                                      $ 27, 489,000         $ 24,114,000
   Accounts Payable                                              25,326,000           21,038,000
   Accrued Expenses                                              11,985,000            6,511,000
   Current Maturities of Long-Term Debt                           1,984,000            2,234,000
   Income Taxes Payable                                             569,000              358,000 
-------------------------------------------------------------------------------------------------
Total Current Liabilities                                        67,353,000           54,255,000 
-------------------------------------------------------------------------------------------------
Long-Term Debt, Less Current Maturities                          16,219,000           16,219,000
Other Long-Term Liabilities                                       1,346,000            1,226,000
Deferred Income Taxes                                             5,273,000            5,174,000 
-------------------------------------------------------------------------------------------------
Total Liabilities                                                90,191,000           76,874,000 
-------------------------------------------------------------------------------------------------
Stockholders' Equity:
   8 1/4% cumulative convertible preferred, $25 par value;
      issuable in series, 120,000 shares authorized;
      31,536 shares issued, 15,044 shares outstanding               788,000              788,000
   Common stock, Class A, non-voting, $25 par value;
      800,000 shares authorized, 349,234 shares issued,
      291,572 shares at November 30, 1997 and 292,354
      shares at June 1, 1997 outstanding                          8,729,000            8,729,000
   Common stock, Class B, voting, $25 par value;
      880,000 shares authorized, 493,123 shares issued,
      426,985 shares at November 30, 1997 and 427,131
      shares at June 1, 1997 outstanding                         12,328,000           12,328,000
   Capital Paid in Excess of Par Value                            1,623,000            1,623,000
   Retained Earnings                                             35,198,000           31,570,000
   Treasury Stock, at Cost                                      ( 7,932,000)         ( 7,887,000)
   Other Reserves                                               (   240,000)               6,000 
-------------------------------------------------------------------------------------------------
Total Stockholders' Equity                                       50,494,000           47,157,000 
-------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity                    $ 140,685,000         $124,031,000 
-------------------------------------------------------------------------------------------------
</TABLE>

     See accompanying notes to condensed consolidated financial statements.
                                       4
<PAGE>   5
                       PART I  --  FINANCIAL INFORMATION
                    Item 1.  Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
                Condensed Consolidated Statements of Operations
                                  (Unaudited)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                       Twenty-Six Weeks Ended            Thirteen Weeks Ended
                                    November 30,    December 1,    November 30,      December 1,
                                        1997           1996            1997             1996   
-----------------------------------------------------------------------------------------------
<S>                               <C>             <C>             <C>              <C>
Net Sales                         $124,002,000    $125,155,000    $ 68,110,000     $69,036,000
Cost of Goods Sold                  93,878,000      94,694,000      51,185,000      51,454,000 
-----------------------------------------------------------------------------------------------
Gross Profit                        30,124,000      30,461,000      16,925,000      17,582,000

Selling Expenses                    17,327,000      17,565,000       9,960,000      10,025,000
Administrative Expenses              4,500,000       4,725,000       2,164,000       2,536,000 
-----------------------------------------------------------------------------------------------
Operating Profit                     8,297,000       8,171,000       4,801,000       5,021,000

Interest Expense                     1,702,000       1,961,000         817,000       1,027,000
Other Expenses, Net                     75,000         406,000       ( 161,000)        210,000 
-----------------------------------------------------------------------------------------------
Earnings Before
  Income Taxes                       6,520,000       5,804,000       4,145,000       3,784,000

Income Taxes                         2,481,000       2,239,000       1,633,000       1,470,000 
-----------------------------------------------------------------------------------------------
Net Earnings                         4,039,000       3,565,000       2,512,000       2,314,000
Dividends on Preferred Stock            16,000          16,000           8,000           8,000 
-----------------------------------------------------------------------------------------------
Net Earnings Applicable
  to Common Stock                 $  4,023,000    $  3,549,000    $  2,504,000     $ 2,306,000 
-----------------------------------------------------------------------------------------------
Earnings Per Share:
   Net Earnings, Primary          $       5.60    $       4.93    $       3.48     $      3.21
   Dividends Per Share, Common           0.550           0.550           0.275           0.275
   Average Shares Outstanding          718,688         720,556         719,037         719,177 
-----------------------------------------------------------------------------------------------
</TABLE>

     See accompanying notes to condensed consolidated financial statements.
                                       5
<PAGE>   6
                       PART I  --  FINANCIAL INFORMATION
                    Item 1.  Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
           Condensed Consolidated Statements of Stockholders' Equity
                                   Unaudited


<TABLE>
<CAPTION>
                                                      Cumulative
                                                Convertible Preferred                                                  
                                                           Stock                   Common Stock           Common Stock 
                                                Series A and Series B                Class A                Class B             
                                                ---------------------               ----------              --------            
                                       Total                                                                           
                                  Stockholders'                                                                        
                                      Equity     Shares      Amount              Shares         Amount        Shares   
<S>                               <C>            <C>        <C>               <C>           <C>              <C>
Balance, June 1, 1997             $47,157,000    31,536      $788,000           349,210      $8,729,000       493,123  
                                                                                                                       
Net Earnings for the Year           4,039,000                                                                          
                                                                                                                       
Cash Dividends Per Share:                                                                                              
                                                                                                                       
   Preferred Stock                (    16,000)                                                                         
                                                                                                                       
   Common Stock                   (   395,000)                                                                         
                                                                                                                       
Redemption of Common Stock                                                                                             
                                                                                                                       
   (Class A 782 Shares and                                                                                             
   Class B 146 Shares)            (    45,000)                                                                         
                                                                                                                       
Unrealized Gain on Investments    (   246,000)                                                                         
                                                                                                                       
-------------------------------------------------------------------------------------------------------------------------
Balance, November 30, 1997        $ 50,494,000   31,536      $788,000           349,210      $8,729,000        493,123  
=========================================================================================================================

<CAPTION>
                                 
                                 
                                                                          Treasury
                                                                           Stock
                                                                           -----
                                                 Capital Paid
                                                 in Excess of     Retained
                                      Amount      Par Value       Earnings       Shares        Amount           Other
<S>                                 <C>           <C>           <C>             <C>         <C>               <C>
Balance, June 1, 1997               $12,328,000   $1,623,000    $31,570,000      138,952     $(7,887,000)     $   6,000
                                 
Net Earnings for  the Year                                        4,039,000
                                 
Cash Dividends Per Share:        
                                 
   Preferred Stock                                               (   16,000)
                                 
   Common Stock                                                  (  395,000)
                                 
Redemption of Common Stock       
                                 
   (Class A 782 Shares and       
   Class B 146 Shares)                                                               928       (  45,000)
                                 
Unrealized Gain on Investments                                                                                 (246,000)
                                 
-------------------------------------------------------------------------------------------------------------------------
Balance, November 30, 1997         $12,328,000    $1,623,000      $35,198,000    139,880     $(7,932,000)     $(240,000) 
=========================================================================================================================
</TABLE>





     See accompanying notes to condensed consolidated financial statements.
                                       6
<PAGE>   7
                       PART I  --  FINANCIAL INFORMATION
                         Item 1.  Financial Statements
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
          Condensed Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
                                                    Period:  November 30, 1997       December 1, 1996  
-------------------------------------------------------------------------------------------------------
<S>                                                            <C>                     <C>
Increase (Decrease) in Cash and Cash Equivalents
Operating Activities:
   Net Earnings                                                 $    4,039,000         $     3,565,000
   Adjustments to Reconcile Net Earnings to Net
      Cash Used in Operating Activities:
         Depreciation and Amortization                               2,805,000               2,704,000
         Deferred Income Taxes                                          99,000                  36,000
   Changes in Assets and Liabilities:
         Accounts Receivable                                     (   1,433,000)         (    6,545,000)
         Inventory                                               (  16,595,000)         (   12,959,000)
         Prepaid Items                                           (     135,000)                669,000
         Accounts Payable and Accrued Expense                        9,761,000               9,198,000
         Income Taxes Payable                                          212,000                 882,000
         Other Liabilities                                             121,000                 205,000 
-------------------------------------------------------------------------------------------------------
Net Cash Used in Operating Activities                            (   1,126,000)         (    2,245,000)
-------------------------------------------------------------------------------------------------------
Investing Activities:
   (Increase) Decrease in Other Non-Current Assets                     420,000                 568,000
   Acquisitions of Property, Plant and Equipment                 (   2,119,000)         (    2,810,000)
-------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities                            (   1,699,000)         (    2,242,000)
-------------------------------------------------------------------------------------------------------
Financing Activities:
   Increase (Decrease) in Notes Payable                              3,375,000               8,801,000
   Payments on Long-Term Debt and Capital Leases                 (     250,000)         (      402,000)
   Payment of Dividends                                          (     411,000)         (      413,000)
   Redemption of Common Stock                                    (      45,000)         (      117,000)
-------------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities                            2,669,000               7,869,000 
-------------------------------------------------------------------------------------------------------
Net Increase in Cash and Cash Equivalent                         (     156,000)              3,382,000
Cash and Cash Equivalents, Beginning of Period                       3,312,000               1,112,000 
-------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Period                       $     3,156,000         $     4,494,000 
-------------------------------------------------------------------------------------------------------
</TABLE>

     See accompanying notes to condensed consolidated financial statements.
                                       7
<PAGE>   8
                        PART I -- FINANCIAL INFORMATION
                    Item 1.  Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                     November 30, 1997 and December 1, 1996
                                  (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 generally accepted accounting
         principles 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 31.  Accordingly, these financial statements
         reflect activity for the twenty six week periods of November 30, 1997
         and December 1, 1996.

         It is suggested that these condensed consolidated financial statements
         be read in conjunction with the consolidated financial statements and
         the notes thereto included in Form 10-K for the Corporation's fiscal
         year ended June 1, 1997.

         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 for the interim period.

         The results for 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 $90.0 million of which $27,489,000 was borrowed at
         November 1, 1997.  The average cost of funds during the period ended
         November 30, 1997 was 6.10%.




                                        8
<PAGE>   9
                       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>
                                                       November 30, 1997     June 1, 1997  
-------------------------------------------------------------------------------------------
<S>                                                  <C>                       <C>
8.74% unsecured senior notes payable
   to an insurance company, due
   fiscal years ending 1995-2007                     $17,857,000               $17,857,000

Installment obligation payable to a related
   party, due in equal annual installments
   in fiscal years ending 1996-2000
   interest at prime rate (8.50% at
   November 30, 1997)                                    221,000                   221,000

6.33% installment obligation payable to a
   related party, due fiscal years ending
   1996-1998                                             125,000                   375,000 
-------------------------------------------------------------------------------------------
                                                      18,203,000                18,453,000

Less current maturities                                1,984,000                 2,234,000 
-------------------------------------------------------------------------------------------

Net Long Term Debt                                    16,219,000                16,219,000 
-------------------------------------------------------------------------------------------
</TABLE>

The term loan agreements with the insurance company 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.

                                       9
<PAGE>   10
                       PART I  --  FINANCIAL INFORMATION
                    Item 1.  Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
                    Notes to Condensed 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. The
         Corporation believes that the cost of such purchases and sales are
         competitive with alternative sources of supply and markets.

<TABLE>
<CAPTION>
                                          Twenty Six Weeks Ended          Thirteen Weeks Ended
                                       November 30,     December 1,   November 30,     December 1,
                                           1997            1996           1997             1996      
-----------------------------------------------------------------------------------------------------
<S>                                    <C>             <C>             <C>              <C>
Revenues:

   Park 100 Foods, Inc.                $2,465,000      $724,000        $718,000         $446,000

Corporate Charges:

   Snyder's of Hanover, Inc.               88,000        87,000          44,000           43,000

Expenditures:

   Park 100 Foods, Inc.                   142,000       161,000               0           69,000
   Patty & John's, Inc.                         0        10,000               0                0
   The Cannery Press, Inc.                      0        14,000               0                0
   ARWCO Corporation                       10,000         7,000           6,000            4,000
   Warehime Enterprises, Inc.               2,000        47,000           1,000            1,000
   John A. & Patricia M. Warehime          30,000        23,000          14,000           12,000
   James G. Sturgill                       40,000        38,000          16,000           38,000
   Sturgill & Associates                        0        23,000               0            7,000
   Lippy Brothers, Inc.                    69,000       179,000          69,000          179,000     
-----------------------------------------------------------------------------------------------------
</TABLE>





                                        10
<PAGE>   11
                       PART I  --  FINANCIAL INFORMATION
                    Item 1.  Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
                    Notes to Condensed Financial Statements
                                  (Unaudited)
--------------------------------------------------------------------------------

The respective November 30, 1997 and June 1, 1997 account balances with related
companies are as follows:

<TABLE>
<CAPTION>
                                                        November 30, 1997    June 1, 1997  
-------------------------------------------------------------------------------------------
<S>                                                           <C>             <C>
Accounts Receivable:

   Snyder's of Hanover, Inc.                                  $    20,000     $     16,000
   Park 100 Foods, Inc.                                           279,000          906,000

Accounts Payable:

   Park 100 Foods, Inc.                                             2,000           30,000
   Arwco Corporation                                                1,000            - 0 -
   Warehime Enterprises, Inc.                                       - 0 -            1,000
   Lippy Brothers, Inc.                                           235,000            - 0 -

Notes Payable:

   Warehime Enterprises, Inc.                                     125,000          375,000
   Cyril T. Noel                                                  221,000          221,000

-------------------------------------------------------------------------------------------
</TABLE>





                                       11
<PAGE>   12
                        PART I -- FINANCIAL INFORMATION
                    Item 1.  Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)
--------------------------------------------------------------------------------

(5)      CONTINGENCIES

         LEGAL MATTERS

         The Corporation is involved in various 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 Company's consolidated financial
         position, results of operations or liquidity.

         See "Legal Proceedings" for a further description of certain legal
         proceedings in which the Corporation is currently involved.

         YEAR 2000

         Many existing computer programs, including those utilized the by the
         Company, use only two digits to identify a year in the date field.
         These programs were designed and developed without considering the
         impact of the upcoming change in the century.  If not corrected, many
         computer applications could fail or create erroneous results by or at
         the Year 2000 (the "Year 2000 Issue").  The Company has evaluated the
         costs associated with addressing the Year 2000 Issue and has
         determined that such cost is not reasonably likely to affect the
         Company's future financial results, not is it likely to cause the
         Company's reported financial information not to be necessarily
         indicative of future operating results or future financial condition.





                                       12
<PAGE>   13
                        PART I -- FINANCIAL INFORMATION
                Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of Operations
                  HANOVER FOODS CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------

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 1, 1997.

GENERAL

Prices for processed food tend to rise with overall inflation and not in line
with raw farm products.  Price surges in farm products due to supply shocks and
crop problems are not passed on to consumers dollar for dollar.  Consumers
often switch from one food product that has risen to another which has not
changed in price.  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 vegetable processing
industry has matured in North America.  The overall number of pounds of frozen
and canned vegetables consumed will not significantly increase from year to
year.  Sales growth by processor 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 OPERATIONS

NET SALES

Consolidated net sales were $124.0 million for the twenty six week period ended
November 30, 1997.  The represents a decrease of .9% over the twenty six week
period ended December 1, 1996 consolidated net sales of $125.2 million.
Consolidated net sales were $68.1 million for the thirteen week period ended
November 30, 1997, a 1.3% decrease from consolidated net sales of $69.0 million
for the corresponding period in the prior year.  The decrease was due to
decreases in canned and frozen branded sales offset by increased food service,
private label and industrial sales.

COST OF GOODS SOLD

Cost of goods sold were $93.9 million, or 75.7% of consolidated net sales in
the twenty six week period ended November 1, 1997 as compared to $94.7 million,
or 75.7% of consolidated net sales, for the corresponding period in 1996.  Cost
of goods sold was $51.2 million, or 75.2% of

                                       13
<PAGE>   14
                        PART I -- FINANCIAL INFORMATION
                Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of Operations
                  HANOVER FOODS CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------

consolidated net sales, for the thirteen week period November 30, 1997 as
compared to 51.5 million, or 74.5% of consolidated net sales, for the
corresponding period in 1996.  The increase in cost of goods sold as a
percentage of net sales for the thirteen week period ended November 30, 1997
resulted from a decrease in the average selling prices per case of product,
offset by decreases in the cost of operations.  The cost of goods sold as a
percentage of net sales for the twenty six week period ended November 30, 1997
remains consistent with the prior year periods.

SELLING EXPENSES

Selling expenses were $17.3 million, or 14.0% of consolidated net sales, for
the twenty six week period ended November 30, 1997 as compared to $17.6 million
or 14.0% of consolidated net sales during the corresponding period in 1996.
Selling expenses were $10.0 million or 14.6% of consolidated net sales for the
thirteen week period ended November 30, 1997 compared to $10.0 million, or
14.5% of consolidated net sales, during the corresponding period in 1996.  The
decrease in selling expenses reflects lower expenses related to coupon
programs.

ADMINISTRATIVE EXPENSES

Administration expenses as a percentage of consolidated net sales were 3.6% for
the twenty six week period ended November 30, 1997 compared to 3.8% for the
corresponding period of 1996. Administrative expenses as a percentage of
consolidated net sales were 3.2% for the thirteen week period ended November
30, 1997 compared to 3.7% of consolidated net sales during the corresponding
period in 1996.  This decrease is attributed to decreases in outside consulting
services, both legal and financial.

INTEREST EXPENSE

Interest expense was $1,702,000 for the twenty six week period ended November
30, 1997 as compared to $1,961,000 for the same period in 1996.  Interest
expense was $0.8 million for the thirteen week period ended November 30, 1997
compared to $1.0 million for the same period in 1996.  The decrease in interest
is mainly due to lower average short-term borrowings during the current period,
as well as lower borrowing rates.



                                       14
<PAGE>   15
                        PART I -- FINANCIAL INFORMATION
                Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of Operations
                  HANOVER FOODS CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------

OTHER EXPENSES, NET

Other expenses, net was $75,000 for the twenty six week period ended November
30, 1997 as compared to $406,000 for the same period in 1996.  Other expenses,
net was $161,000 in income for the thirteen week period ended November 30, 1997
compared to expense of $210,000 for the same period in 1996.  Gain on sale of
investments, foreign exchange gain and increased interest earned attributed to
the decreased expenses during both the twenty six and thirteen week periods
compared to the prior periods.

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

Cash used by operating activities for the twenty six week period ended November
30, 1997 was $1.1 million as compared to $2.2 million during the same period of
1996.  The combination of increased inventory levels and accounts receivable
levels, offset by increases in accounts payable and accrued expenses, utilized
less cash flow.  By comparison the same period in 1996 consumed more cash for
increased accounts receivable offset by less cash consumed for increased
inventory levels and less cash generated from increased accounts payable and
accrued expenses.

INVESTING ACTIVITIES

During the twenty six week period ended November 30, 1997 the Corporation spent
approximately $2.1 million for the purchase of land and plant upgrades and
expansions.  This compares to $2.8 million spent during the same period last
year for capital projects.





                                       15
<PAGE>   16
                        PART I -- FINANCIAL INFORMATION
                Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of Operations
                  HANOVER FOODS CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------

FINANCING ACTIVITIES

The increase in notes payable of approximately $3.4 million during the twenty
six week period ended November 30, 1997 represents borrowings made against
available seasonal lines of credit from financial institutions for use in
operations.

The Corporation has available seasonal lines-of-credit from financial
institutions in the amount of $90.0 million of which $27.5 million was utilized
as of November 30, 1997.  Additional borrowings are permitted within prescribed
parameters in existing debt agreements.

Management believes these credit facilities provide adequate cash availability
for seasonal operating requirements.





                                       16
<PAGE>   17
                          PART II -- OTHER INFORMATION
                  HANOVER FOODS CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------

1        Legal Proceedings

         1995 Warehime Family Litigation

         On February 1, 1995, Michael A. Warehime, J. William Warehime and
         Elizabeth W. Stick, three Class B shareholders of the Corporation,
         filed a compliant in the Court of Common Pleas of York County,
         Pennsylvania against the Corporation and John A. Warehime (Chairman of
         the Corporation), in his capacity as voting trustee of two voting
         trusts entitling him to vote approximately 52% of the Class B common
         stock.  The Court has dismissed various claims and parties in the
         lawsuit and the only remaining parties are Michael A. Warehime as
         plaintiff and John A. Warehime as defendant.  The only remaining
         claims are (i) a claim for breach of fiduciary duty based on exercise
         of powers beyond those granted by certain voting trust agreements;
         (ii) a claim for breach of fiduciary duty for use of the voting trusts
         in a manner harmful to their beneficiaries;  (iii) and a count
         requesting removal of John A. Warehime as the voting trustee of the
         voting trusts.

         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 suit also named 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 directors' fees. (Since the filing of
         this lawsuit, John A. Warehime's 1995 Employment Agreement was
         amended.  See Note 6 to Consolidated Financial Statements contained in
         the Form 10-K Report of the Corporation for the fiscal year ended June
         1, 1997.)  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
         has been filed from the Court's June 24, 1997 Order.  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
         these allegations are currently being investigated by a special
         committee of the Board of Directors.



                                       17
<PAGE>   18
                          PART II -- OTHER INFORMATION
                  HANOVER FOODS CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------

         1997 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 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) do not agree in writing to 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 below: Michael A.  Warehime, John A. Warehime, Sally
         W. Yelland, J. William Warehime and Elizabeth W. Stick.  The
         above-named Class B shareholders are all members of the Warehime
         family.

         The Amended and Restated Articles create a Series C Convertible
         Preferred Stock and authorize the Board of Directors to issue up to
         10,000 shares of such stock to the trustees of the Corporation's
         401(k) Savings Plan (or a similar employee benefit plan).  At least a
         majority of the trustees of the Corporation's 401(k) Savings Plan (or
         similar employee benefit plan), who are appointed by the Board of
         Directors, must be "disinterested directors" of the Corporation.  If
         the Class B shareholders named above cannot unanimously agree in
         writing on the composition of the Board of Directors or on other
         matters specified below, the Amended and Restated Articles permit each
         of the 10,000 shares of Series C Convertible Preferred Stock the right
         to cast 35 votes in the election of directors, and each share of Class
         A Common Stock would have one-tenth (1/10) of a vote per share,
         thereby enabling them to influence the ultimate result of the election
         by the Class B shares.  The Amended and Restated Articles also permit
         the trustees and the Class A shareholders to similarly vote on
         proposals to remove directors, and in connection with any proposal
         (not previously approved by the Board of Directors) to further amend
         the Articles of Incorporation or By-laws or to effectuate a merger,
         consolidation, division, or


                                       18
<PAGE>   19
                          PART II -- OTHER INFORMATION
                  HANOVER FOODS CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------

         sale of substantially all of the assets of the Corporation.  The
         voting power of the Series C Convertible Preferred Stock would cease
         five (5) years after its issuance.  Under the Amended and Restated
         Articles, each of the shares of Series C Convertible Preferred Stock
         is convertible into one share of Class A Common Stock and is not
         entitled to vote except in the event that the Class B shareholders
         previously named cannot agree in writing on the composition of the
         Board of Directors or on the important matters specified above.

         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 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.  Appeals have been filed from the denial of the plaintiffs'
         motion for a preliminary injunction.

         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.  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.  This motion was denied on August 11, 1997.  Michael A.
         Warehime has filed an appeal.  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.





                                       19
<PAGE>   20
                          PART II -- OTHER INFORMATION

                  HANOVER FOODS CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------

         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 Corporation 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 of 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.

         Other Litigation

         On December 12, 1996, OSHA cited the Corporation with two violations
         of OSHA regulations arising out of accidents which occurred at its
         Clayton, Delaware plant.  The proposed penalty for each violation is
         $70,000.  On December 18, 1996, the Corporation filed its Notice of
         Contest, contesting both alleged violations and the proposed
         penalties. On September 22, 1997, pursuant to a final order of the
         U.S. Occupational Safety and Health Review Commission, the two
         violations were settled between the parties without admission of
         liability for $4,750 and $35,000, respectively.

         On March 24, 1997, OSHA cited the Corporation with twenty-two
         violations of OSHA regulations arising out of plant inspections which
         occurred at its Clayton, Delaware plant. The proposed penalty for said
         violations is $498,000.  On April 11, 1997, the Corporation filed its
         Notice of Contest, contesting all of the alleged violations and the
         proposed penalties.  On September 22, 1997, pursuant to a final order
         of the U.S. Occupational Safety and Health Review Commission, three of
         the twenty-two violations were settled between the parties without
         admission of liability for a total of $65,000.  The Corporation and
         OSHA have reached a tentative settlement agreement regarding the
         remaining citations, by which the Corporation shall pay, without
         admission of liability, the sum of $95,000.  The agreement will be
         formalized and submitted for approval in the month of January, 1998.





                                       20
<PAGE>   21
                          PART II -- OTHER INFORMATION
                  HANOVER FOODS CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------

2-5      None

6        Exhibits and Reports on 8-K.

         (a)     Exhibits

                 11  -  Computation of Earnings Per Share
                 27  -  Financial Data Schedule

         (b)     Reports on Form 8-K:

                 No reports on Form 8-K have been filed during the period from
                 which this report is filed.


                                       21
<PAGE>   22
                                   SIGNATURES

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.


Date:    January 14, 1998          
                                   
                                   HANOVER FOODS CORPORATION
                                   
                                   BY   /s/ GARY T. KNISELY               
                                        ----------------------------------
                                        Gary T. Knisely
                                        Executive Vice President
                                        
                                   BY   /s/ PIETRO GIRAFFA               
                                        ----------------------------------
                                        Pietro Giraffa, Controller





                                       22