<PAGE>


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

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

         For the Quarterly Period Ended September 2, 2001

                                       OR

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

                       Commission File Number -- 0-17896

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

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

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

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

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

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

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

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


                                       1
<PAGE>
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES

                                    FORM 10-Q

                 For the Thirteen Weeks Ended September 2, 2001


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

      Item 1 -- Financial Statements:

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

           Condensed Consolidated Statements of Operations (Unaudited)
             Thirteen Weeks Ended September 2, 2001
             and August 27, 2000 ......................................      5

           Condensed Consolidated Statements of Stockholders'
             Equity, (Unaudited) Thirteen Weeks Ended September 2, 2001      6

           Condensed Consolidated Statements of Cash Flows
             (Unaudited), Thirteen Weeks Ended September 2, 2001
             and August 27, 2000 ......................................      7

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

      Item 2 -- Management's Discussion and Analysis of Financial
              Condition and Results of Operations .....................     17
Part II -- Other Information ..........................................     21

      Item 1 -- Legal Proceedings .....................................     20
      Item 2 -- Changes in Securities .................................     23
      Item 3 -- Defaults upon Senior Securities .......................     23
      Item 4 -- Submission of Matters to a Vote of Security Holders ...     23
      Item 5 -- Other Information .....................................     23
      Item 6 -- Exhibits and Reports on Form 8-K ......................     23
</TABLE>


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


<TABLE>
<CAPTION>
                                                      September 2, 2001  June 3, 2001
ASSETS                                                   (Unaudited)
-------------------------------------------------------------------------------------
<S>                                                   <C>                <C>
Current Assets:
      Cash and Cash Equivalents                         $  2,743,000     $  1,824,000
      Accounts and Notes Receivable, Net                  26,135,000       27,411,000
      Accounts Receivable from Related Parties, Net                0          115,000
      Inventories
         Finished Goods                                   59,987,000       44,387,000
         Raw Materials and Supplies                       14,586,000       16,907,000
      Prepaid Expenses                                     2,007,000        1,930,000
      Deferred Income Taxes                                  917,000          917,000
-------------------------------------------------------------------------------------
Total Current Assets                                     106,375,000       93,491,000
-------------------------------------------------------------------------------------
Property, Plant and Equipment, at Cost:
      Land and Buildings                                  52,212,000       52,140,000
      Machinery and Equipment                            118,581,000      114,649,000
      Leasehold Improvements                                 544,000          535,000
-------------------------------------------------------------------------------------
                                                         171,337,000      167,324,000
      Less Accumulated Depreciation and
        Amortization                                      95,112,000       92,924,000
-------------------------------------------------------------------------------------
                                                          76,225,000       74,400,000
      Construction in Progress                             2,256,000        4,437,000
-------------------------------------------------------------------------------------
Total Property, Plant and Equipment                       78,481,000       78,837,000
-------------------------------------------------------------------------------------
Other Assets:
      Intangible Assets, Net                               3,689,000        3,735,000
      Other Assets                                         4,925,000        4,665,000
-------------------------------------------------------------------------------------
Total Assets                                            $193,470,000     $180,728,000
-------------------------------------------------------------------------------------
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


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

<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY                           September 2, 2001     June 3, 2001
                                                                  (Unaudited)
-------------------------------------------------------------------------------------------------
<S>                                                            <C>                  <C>
Current Liabilities:
      Notes Payable - Banks                                      $  59,521,000      $  52,328,000
      Accounts Payable                                              25,603,000         24,062,000
      Account Payable from related Parties, Net                         21,000                  0
      Accrued Expenses                                              10,569,000          7,835,000
      Current Maturities of Long-Term Debt                           1,801,000          1,801,000
      Income Taxes Payable                                             831,000            639,000
-------------------------------------------------------------------------------------------------
Total Current Liabilities                                           98,346,000         86,665,000
-------------------------------------------------------------------------------------------------
Long-Term Debt, Less Current Maturities                              8,937,000          8,940,000
Other Liabilities                                                    3,820,000          3,636,000
Deferred Income Taxes                                                3,922,000          4,022,000
-------------------------------------------------------------------------------------------------
Total Liabilities                                                  115,025,000        103,263,000
-------------------------------------------------------------------------------------------------
Stockholders' Equity:
      Series A & B cumulative convertible preferred, $25
           Par Value, 120,000 shares authorized;
           31,216 shares issued at June 3, 2001 and
           September 2, 2001; 14,724 shares outstanding
           at June 3, 2001 and September 2, 2001                       780,000            780,000
      Series C cumulative convertible preferred, $25
           Par Value, 10,000 shares authorized; 10,000
           shares issued and outstanding                               250,000            250,000
      Common stock, Class A, non-voting, $25 Par Value;
           800,000 shares authorized, 349,292 shares
           issued at June 3, 2001 and September 2, 2001;
           288,247 shares outstanding at June 3, 2001 and
           September 2, 2001                                         8,732,000          8,732,000
      Common stock, Class B, voting, $25 Par Value;
           880,000 shares authorized, 635,572 shares issued,
           at June 3, 2001 and September 2, 2001; 426,249
           shares outstanding June 3, 2001 and
           September 2, 2001                                        15,889,000         15,889,000
      Capital Paid in Excess of Par Value                           15,254,000         15,254,000
      Retained Earnings                                             62,468,000         61,273,000
      Treasury Stock, at Cost                                       (8,148,000)        (8,148,000)
      Value of Shares held in Employee Benefit -
           142,449 shares at June 3, 2001 and
           September 2, 2001                                       (16,667,000)       (16,667,000)
      Accumulated Other Comprehensive Income (Loss)                   (113,000)           102,000
-------------------------------------------------------------------------------------------------
Total Stockholders' Equity                                          78,445,000         77,465,000
-------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity                       $ 193,470,000        180,728,000
-------------------------------------------------------------------------------------------------
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


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

<TABLE>
<CAPTION>
                                            THIRTEEN WEEKS ENDED
                                    September 2, 2001   August 27, 2000
                                                         (As restated)
-----------------------------------------------------------------------
<S>                                 <C>                 <C>
Net Sales                              $63,380,000        $65,034,000
Cost of Goods Sold                      49,353,000         49,310,000
-----------------------------------------------------------------------
Gross Profit                            14,027,000         15,724,000

Selling Expenses                         7,870,000          9,559,000
Administrative Expenses                  3,101,000          2,889,000
-----------------------------------------------------------------------
Operating Profit                         3,056,000          3,276,000

Interest Expense                           869,000          1,131,000

Other Expenses, Net                        203,000            236,000
-----------------------------------------------------------------------
Earnings Before Income Taxes             1,984,000          1,909,000

Income Taxes                               543,000            735,000
-----------------------------------------------------------------------
Net Earnings                             1,441,000          1,174,000
Dividends on Preferred Stock                10,000             10,000
-----------------------------------------------------------------------
Net Earnings Applicable to
      Common Stock                       1,431,000          1,164,000
-----------------------------------------------------------------------
Earnings Per Share:
      Net Earnings Per Common
           Share - Basic                      2.00               1.63
      Net Earnings Per Common
           Share - Diluted                    1.98               1.61
Dividends per Share, Common                  0.275              0.275
Basic Weighted Average Shares              714,496            714,670
Diluted Weighted Average Shares            727,919            728,349
-----------------------------------------------------------------------
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
            Condensed Consolidated Statements of Stockholders' Equity
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                Cumulative         Cumulative
                                                Convertible        Convertible
                                 Total        Preferred Stock    Preferred Stock      Common Stock          Common Stock
                             Stockholders'     Series A & B         Series C             Class A              Class B
                                Equity       Shares   Amount    Shares   Amount    Shares     Amount    Shares     Amount
----------------------------------------------------------------------------------------------------------------------------
<S>                          <C>             <C>     <C>        <C>     <C>        <C>      <C>         <C>      <C>
Balance, June 3, 2001        $  77,465,000   31,216  $ 780,000  10,000  $ 250,000  349,292  $8,732,000  635,572  $15,889,000

Net Earnings for the Period      1,441,000

Cash Dividends Per Share:
      Preferred -  $2.0625
       annually                    (10,000)
      Common  - $1.10
       annually                   (236,000)
Other Comprehensive Loss          (215,000)
----------------------------------------------------------------------------------------------------------------------------

Balance, September 2, 2001   $  78,445,000   31,216  $ 780,000  10,000  $ 250,000  349,292  $8,732,000  635,572  $15,889,000
----------------------------------------------------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
                                 Capital
                                 Paid In                                                                  Accumulated
                                  Excess                     Treasury Stock      Employee Stock Trust        Other
                                  Of Par     Retained                                                    Comprehensive
                                  Value      Earnings     Shares      Amount     Shares      Amount       Income(Loss)
----------------------------------------------------------------------------------------------------------------------
<S>                            <C>          <C>           <C>      <C>           <C>      <C>              <C>
Balance, June 3, 2001          $15,254,000  $61,273,000   144,411  $(8,148,000)  142,449  ($16,667,000)    $ 102,000

Net Earnings for the Period                   1,441,000

Cash Dividends Per Share:
      Preferred -  $2.0625
       annually                                 (10,000)
      Common  - $1.10
       annually                                (236,000)
Other Comprehensive Loss                                                                                  ($ 215,000)
----------------------------------------------------------------------------------------------------------------------

Balance, September 2, 2001     $15,254,000  $62,468,000   144,411  $(8,148,000)  142,449  ($16,667,000)   ($ 113,000)
----------------------------------------------------------------------------------------------------------------------
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


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

<TABLE>
<CAPTION>
                                                                Period               Period
                                                           September 2, 2001     August 27, 2000
------------------------------------------------------------------------------------------------
<S>                                                        <C>                   <C>
Increase (Decrease) in Cash and Cash Equivalents
Operating Activities:
      Net Earnings                                           $  1,441,000         $  1,174,000
      Adjustments to Reconcile Net Earnings:
           To Net Cash Used In Operating Activities:
                Depreciation and Amortization                   2,234,000            2,009,000
                Deferred Income Taxes                            (100,000)             455,000
                Changes in Assets and Liabilities:
                Accounts Receivable                             1,391,000            3,690,000
                Inventories                                   (13,279,000)         (14,503,000)
                Prepaid Expenses                                  (77,000)            (405,000)
                Accounts Payable and Accrued Expenses           4,296,000            4,090,000
                Income Taxes Payable                              192,000             (695,000)
                Other Liabilities                                 184,000              143,000
------------------------------------------------------------------------------------------------
Net Cash Used in Operating Activities                          (3,718,000)          (4,042,000)
------------------------------------------------------------------------------------------------
Investing Activities:
      Increase in Other Assets                                   (475,000)            (122,000)
      Acquisitions of Property, Plant and Equipment            (1,832,000)          (1,610,000)
------------------------------------------------------------------------------------------------
Net Cash Used In Investing Activities                          (2,307,000)          (1,732,000)
------------------------------------------------------------------------------------------------
Financing Activities:
      Increase in Notes Payable                                 7,193,000            2,092,000
      Payments on Long-Term Debt                                   (3,000)             (10,000)
      Payment of Dividends                                       (246,000)            (207,000)
------------------------------------------------------------------------------------------------
Net Cash Provided by (Used In) Financing Activities             6,944,000            1,875,000
------------------------------------------------------------------------------------------------
Net Increase(Decrease) in Cash and Cash Equivalents               919,000           (3,899,000)
Cash and Cash Equivalents, Beginning of Period                  1,824,000            6,978,000
------------------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Period                     $  2,743,000         $  3,079,000
------------------------------------------------------------------------------------------------
</TABLE>
     See accompanying notes to condensed consolidated financial statements.


                                       7
<PAGE>
                         PART I -- FINANCIAL INFORMATION
                     Item 1. Financial Statements, Continued
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (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 thirteen week periods ended September 2, 2001 and August
      27, 2000.

      These condensed consolidated financial statements should be read in
      conjunction with the consolidated financial statements and notes thereto
      included in Form 10-K for the Corporation's fiscal year ended June 3,
      2001.

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

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

(2)   SHORT-TERM BORROWINGS

      The Corporation and its subsidiaries maintain short-term unsecured lines
      of credit with various banks providing credit availability amounting to
      $90.0 million, of which $59,521,000 was borrowed at September 2, 2001. The
      average cost of funds during the period ended September 2, 2001 was 4.49%.


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

(3)   LONG-TERM DEBT

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

<TABLE>
<CAPTION>
                                                    September 2, 2001    May 28, 2000
-------------------------------------------------------------------------------------
<S>                                                 <C>                  <C>
           8.74% unsecured senior notes payable
                to an insurance company, due
                through 2007                           $10,714,000        $10,714,000

                Other                                       24,000             27,000
-------------------------------------------------------------------------------------
           Total Long-Term Debt                         10,738,000         10,741,000

           Less current maturities                       1,801,000          1,801,000
-------------------------------------------------------------------------------------
           Net Long-Term Debt                          $ 8,937,000        $ 8,940,000
-------------------------------------------------------------------------------------
</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 as amended or waived as of September 2, 2001.


                                       9
<PAGE>

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

--------------------------------------------------------------------------------
(4)   RELATED PARTY TRANSACTIONS

      The Corporation and its subsidiaries, in the normal course of business,
      purchase and sell goods and services to related parties. The Corporation
      believes that the cost of such purchases and sales are competitive with
      alternative sources of supply and markets.


<TABLE>
<CAPTION>

                                               Thirteen Weeks Ended
                                    September 2, 2001        August 27, 2000
--------------------------------------------------------------------------------
<S>                                 <C>                      <C>
REVENUES:

Park 100 Foods, Inc.                    $292,000                $444,000

EXPENDITURES:

    Park 100 Foods, Corp.               $  3,000                $      0
    ARWCO Corporation                   $      0                $  1,000
    Warehime Enterprises, Inc.          $  1,000                $  1,000
    John A. & Patricia M. Warehime      $ 14,000                $ 15,000
    James G. Sturgill                   $      0                $  6,000
    Lippy Brothers, Inc.                $314,000                $234,000
    Schaier Travel, Inc.                $  2,000                $  2,000
</TABLE>
--------------------------------------------------------------------------------


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

--------------------------------------------------------------------------------
The respective September 2, 2001 and June 3, 2001 account balances with related
companies are as follows:

<TABLE>
<CAPTION>
                                    September 2, 2001        June 3, 2001
--------------------------------------------------------------------------------
<S>                                 <C>                      <C>
ACCOUNTS RECEIVABLE:

   Park 100 Foods, Inc.              $ 85,000                    $121,000

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

Accounts Payable:

   ARWCO Corporation                 $  1,000                    $      0
   Lippy Brothers, Inc.              $102,000                    $      0
   James Sturgill                    $  3,000                    $      0
   John & Patricia Warehime          $      0                    $  5,000
   Schaier Travel                    $      0                    $  1,000
</TABLE>


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

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

(5)   COMPREHENSIVE INCOME

      Comprehensive income is determined as follows:

<TABLE>
<CAPTION>
                                                      13 Weeks Ended
                                             September 2, 2001   August 27, 2000
<S>                                          <C>                 <C>

      Net Income                                $1,441,000          $1,251,000

      Unrealized Gain(Loss) on Investments       ($215,000)           $182,000
                                             -------------       -------------

      Comprehensive Income                      $1,226,000          $1,433,000
                                             -------------       -------------
</TABLE>


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


<TABLE>
<CAPTION>
                                                      13 Weeks Ended
                                             September 2, 2001   August 27,2000

<S>                                          <C>                 <C>
Numerator for basic earnings per share:
Net earnings applicable to
   common stock                                 $1,431,000         $1,164,000

Preferred stock dividends                           10,000             10,000
                                             -------------       -------------
Net earnings assuming dilution                   1,441,000          1,174,000
                                             -------------       -------------
Denominator:
Basic weighted average shares                      714,496            714,670

Effect of dilutive securities                       13,423             13,679
                                             -------------       -------------
Diluted weighted average shares                    727,919            728,349
</TABLE>
--------------------------------------------------------------------------------

                                       12
<PAGE>

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

(7) CONTINGENCIES

      LEGAL 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. On November 4,
      1996, the complaint was amended to add additional plaintiffs. On June 24,
      1997, the Court dismissed the amended complaint for failure to make a
      prior demand. An appeal was filed from the court's June 24, 1997 Order. On
      December 2, 1998, the Superior Court of Pennsylvania held that the
      derivative plaintiffs had made adequate demand.

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

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

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

      WAREHIME FAMILY LITIGATION

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


                                       13
<PAGE>
      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),
      Michael A. Warehime, John A. Warehime, Sally W. Yelland, J. William
      Warehime, and Elizabeth W. Stick (all members of the Warehime family), do
      not agree in writing to the composition of the Board of Directors or other
      important matters specified below on or after the 1998 annual shareholders
      meeting, the trustees of the Corporation's 401(k) Savings Plan (or a
      similar employee benefit plan), acting as fiduciaries for the employees
      who participate in the Plan, and the Class A shareholders may become
      entitled to vote in the manner described in the document. Pursuant to the
      Company's Bylaws, nominations for director must be submitted to the
      Company in the manner prescribed by the Bylaws no later than June 1 of the
      year in which the meeting is to occur.

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

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

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

      Under the Amendment, the definition of "disinterested directors" means the
      person who, in the opinion of counsel for the Corporation, meet any of the
      following criteria:


                                       14
<PAGE>
      (i) disinterested directors as defined in Section 1715(e) of the
      Pennsylvania Business Corporations Law of 1988, as amended; (ii) persons
      who are not "interested" directors as defined in Section 1.23 of The
      American Law Institute "Principles of Corporate Governance: Analysis and
      Recommendations" (1994); or (iii) persons who qualify as members of the
      Audit Committee pursuant to Section 303.00 of the New York Stock
      Exchange's Listed Company Manual.

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

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

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


                                       15
<PAGE>
      On November 27, 2000, the Supreme Court of Pennsylvania reversed and
      remanded the Order of the Superior Court issued on December 2, 1998 and,
      in effect, the Order of the Superior Court issued September 12, 2000. In
      reversing the Superior Court's Order, the Supreme Court of Pennsylvania
      held that John A. Warehime, the trustee of the voting trust, did not
      breach his fiduciary duties in voting the trust shares in favor of the
      Amended and Restated Articles of Incorporation. The Supreme Court remanded
      the case to the Pennsylvania Superior Court to consider other issues
      raised by Michael A. Warehime.

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

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

8.    SUBSEQUENT EVENT

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

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

FORWARD LOOKING STATEMENTS

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

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

GENERAL

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

RESULTS OF OPERATIONS
NET SALES

Consolidated net sales were $63.4 million for the thirteen week period ended
September 2, 2001. This represents a decrease of 2.5% over the thirteen week
period ended August 27, 2000 consolidated net sales of $65.0 million. The
decrease of $1.6 million was primarily due to decreased branded retail sales.
These decreases were partially offset by increases in food service sales,
private label and industrial sales.


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


COST OF GOODS SOLD

Cost of good sold were $49.4 million, or 77.9% of consolidated net sales in the
thirteen week period ended September 2, 2001 and $49.3 million or 75.8% of
consolidated net sales for the corresponding period in 2000. The increase in
cost of goods sold as a percentage of net sales resulted primarily from a
reduction in branded retail sales and increased energy costs. The increases were
partially offset by increases in food service sales, private label sales and
industrial sales, but at lower gross profit.

SELLING EXPENSES

Selling expenses were $7.9 million, or 12.4% of consolidated net sales for the
thirteen week period ended September 2, 2001 as compared to $9.6 million or
14.7% of consolidated net sales for the corresponding period in 2000. The
decrease in selling expenses reflects lower planned promotional expenses against
branded retail sales.

ADMINISTRATIVE EXPENSES

Administrative expenses as a percentage of consolidated net sales were 4.9% for
the thirteen week period ended September 2, 2001 and 4.4% for the corresponding
period of 2000. The increase in administrative expenses reflects increases in
corporate outside legal fees and general annual wage increases.

INTEREST EXPENSE

Interest expense was $869,000 for the thirteen week period ended September 2,
2001 as compared to $1,131,000 for the same period in 2000. The decreases in
interest is due to lower average cost of funds during the current period.

OTHER EXPENSES

Other expenses were $203,000 for the thirteen week period ended September 2,
2001 as compared to $236,000 for the same period in 2000. The decrease in other
expenses is primarily due to a decreased foreign translation adjustment compared
to the prior year period.


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

INCOME TAXES

The provision for corporate federal and state income taxes for the thirteen week
period ended September 2, 2001 was $543,000, or 27.4% of pretax earnings, as
compared to $735,000, or 38.5% of pre-tax earnings for the same period in 2000.
The decrease in the effective tax rate is primarily due to increased earnings,
that were not subject to income taxes, in foreign jurisdictions in the current
year period as compared to the prior period.

LIQUIDITY AND CAPITAL RESOURCES

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

OPERATING ACTIVITIES

Net working capital was $8.0 million at September 2, 2001 and $6.8 million at
June 3, 2001. The current ratios were 1.08 on September 2, 2001 and June 3,
2001.

Cash used in operating activities for the thirteen week period ended September
2, 2001 was $3.7 million as compared to cash used in operating activities of
$4.0 million during the same period of 2000. The combination of decreased
accounts receivable, increased accounts payable and accrued expenses offset by
increased inventory levels utilized less cash flow in the thirteen week period
ended September 2, 2001 compared to the prior year period.

INVESTING ACTIVITIES

During the thirteen week period ended September 2, 2001, the Corporation spent
approximately $1.8 million for the purchase of land and plant upgrades and
expansions. This compares to $1.6 million spent during the same period last year
for capital projects.

FINANCING ACTIVITIES

The increase in note payable of approximately $7.2 million during the thirteen
week period ended September 2, 2001 represents borrowings made against available
seasonal lines of credit from financial institutions for use in operations and
plant upgrades and expansions.

The Corporation has available seasonal lines of credit from financial
institutions in the amount of $90.0 million, of which $59.5 million was utilized
as of September 2, 2001. Additional borrowing is permitted within prescribed
parameters in existing debt agreements, which contain certain performance
covenants.

The Company entered into a note agreement to borrow $25 million of senior notes
on September 1, 2001. The Senior Notes bear interest of 7.01% per year and are
repayable in annual installments beginning September 15, 2002. The proceeds of
the Senior Notes were used to reduce the outstanding seasonal lines of bank
credit.

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


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

ITEM 1.  LEGAL PROCEEDINGS

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. On November 4, 1996, the complaint was amended to add additional
plaintiffs. On June 24, 1997, the Court dismissed the amended complaint for
failure to make a prior demand. An appeal was filed from the court's June 24,
1997 Order. On December 2, 1998, the Superior Court of Pennsylvania held that
the derivative plaintiffs had made adequate demand.

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

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

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

WAREHIME FAMILY LITIGATION

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


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

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

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

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

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

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


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

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

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

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

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


                                       22
<PAGE>
                           PART II - OTHER INFORMATION
                   HANOVER FOODS CORPORATION AND SUBSIDIARIES

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

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

ITEM 2. CHANGES IN SECURITIES - None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None
ITEM 5. OTHER INFORMATION - None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - None

      (a)   Exhibits - None

      (b)   Reports on Form 8-K.

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


                                       23
<PAGE>
                                    SIGNATURE


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


                                          HANOVER FOODS CORPORATION


Date:   October 17, 2001                  By: /s/ Gary T. Knisely
                                          --------------------------------------
                                              Gary T. Knisely
                                              Executive Vice President


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


                                       24