UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934

OFFOR THE ~~SECURITIES~~QUARTER ~~EXCHANGE~~ENDED ~~ACT~~JUNE OF30, ~~1934~~ 2003

FOR THE QUARTER ENDED SEPTEMBER 30, 2002

Commission File Number 1-10741

PROVENA FOODS INC.

(Exact name of registrant as specified in its charter)

California		95-2782215
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)
5010 Eucalyptus Avenue, Chino, California		91710
(Address of principal executive offices)		(ZIP Code)

California
(State or other jurisdiction of incorporation or organization)

95-2782215
(I.R.S. employer identification number)

5010 Eucalyptus Avenue, Chino, California (~~909~~Address of principal executive offices) ~~627-1082~~91710 (ZIP Code)

(909) 627-1082(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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨ o

~~The~~Indicate ~~number~~by ofcheck ~~shares~~mark ofwhether ~~Provena~~the ~~Foods~~registrant ~~Inc.~~is ~~Common~~an ~~Stock~~accelerated ~~outstanding~~filer (as ofdefined ~~the~~in rule ~~close~~12b-2 of the ~~period~~Exchange ~~covered~~Act). ~~by this report was:~~

~~Common~~Yes ~~Stock 3,131,646~~o No x

The number of shares of Provena Foods Inc. Common Stock outstanding at July 31, 2003 was:

Common Stock 3,187,923

PROVENA FOODS INC.

~~FORM~~Form 10-Q ~~REPORT~~Report for the Second Quarter Ended June 30, 2003

For the Third Quarter Ended September 30, 2002

Table of Contents

		~~Page~~	Page
PART I—FINANCIAL INFORMATION
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Item
	Condensed Statements of Operations	1
	1.	Financial Statements (Unaudited)	1
	Condensed Balance Sheets	2
		Condensed Statements of Income	1
	Condensed Statements of Cash Flows	3
		Condensed Balance Sheets	2
	Notes to Condensed Financial Statements	4
		Condensed Statements of Cash Flows	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5
		Notes to Condensed Financial Statements	4
	Results of Operations	5
	2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	6
	Swiss American Sausage Co. Meat Division	5
		Results of Operations	6
	Royal-Angelus Macaroni Company Pasta Division	5
		Forward-Looking Statements	6
	The Company	6
		Swiss American Sausage Co. Meat Division	6
	Liquidity and Capital Resources	6
		Royal-Angelus Macaroni Company Pasta Division	6
	New Accounting Standards	8
		The Company	7
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9
		Liquidity and Capital Resources	8
Item 4.	Disclosure Controls and Procedures	9
		Commitments and Contingencies	9
PART II—OTHER INFORMATION
		Critical Accounting Policies	10
Item 1.	Legal Proceedings	9
		New Accounting Standards	10
Item 2.	Changes in Securities	9
	3.	Quantitative and Qualitative Disclosures About Market Risk	11
Item 3.	Defaults Upon Senior Securities	9
	4.	Controls and Procedures	11
Item 4.	Submission of Matters to a Vote of Security Holders	9
PART II.	OTHER INFORMATION
Item 5.	Other Information	9
	1.	Legal Proceedings	11
	Common Stock Repurchase and Sale	9
	2.	Changes in Securities	11
	American Stock Exchange Listing	10
	3.	Defaults Upon Senior Securities	11
	Cash Dividends	10
	4.	Submission of Matters to a Vote of Security Holders	11
	Management Stock Transactions	10
	5.	Other Information	12
Item 6.	Exhibits and Reports on Form 8-K	10
		Common Stock Repurchase and Sale	12
Signature		10
		American Stock Exchange Listing	12
Section 302 Certificates		10
		Cash Dividends	12
Exhibit 99.1—Section 906 Certificates		12
		Management Stock Transactions	12
	6.	Exhibits and Reports on Form 8-K	12

iiSIGNATURE 12

-ii-

PART I. FINANCIAL INFORMATION

ITEM I.

FINANCIAL STATEMENTS

PROVENA FOODS INC.

~~CONDENSED~~Condensed ~~STATEMENTS~~Statements OFof ~~OPERATIONS~~ Income(Unaudited)

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,

	2003			2002		2003		2002

Net sales	$	9,228,643		8,903,207		18,240,984		18,675,267
Cost of sales		8,330,251		7,931,036		16,325,484		16,741,882

Gross profit		898,392		972,171		1,915,500		1,933,385
Operating expenses:
Distribution		386,762		302,719		791,568		607,735
General and administrative		447,297		440,959		926,705		937,994

Operating income		64,333		228,493		197,227		387,656
Interest expense, net		(118,634	)	(137,949	)	(228,022	)	(261,715	)
Other income, net		68,184		59,080		155,360		116,389

Earnings before income tax expense		13,883		149,624		124,565		242,330
Income tax expense		6,000		56,857		50,000		93,857

Net earnings	$	7,883		92,767		74,565		148,473

Earnings per share:
Basic	$	-0-		.03		.02		.05

Diluted	$	-0-		.03		.02		.05

Shares used in computing earnings per share:
Basic		3,175,981		3,113,228		3,166,923		3,106,333

Diluted		3,175,981		3,113,228		3,166,923		3,106,333

	Three Months Ended September 30,					Nine Months Ended September 30,
	2002			2001		2002		2001
Net sales	$	9,725,909		9,757,489		28,401,176		25,401,665
Cost of sales		8,372,080		9,335,728		25,113,962		23,397,872
Gross profit		1,353,829		421,761		3,287,214		2,003,793
Operating expenses:
Distribution		309,689		295,615		917,424		909,977
General and administrative		569,373		410,822		1,507,367		1,241,057
Operating income (loss)		474,767		(284,676	)	862,423		(147,241	)
Interest expense, net		(157,705	)	(174,755	)	(419,419	)	(543,520	)
Other income, net		61,604		69,127		177,993		172,489
Earnings (loss) before income taxes		378,666		(390,304	)	620,997		(518,272	)
Income tax expense (benefit)		150,000		(151,800	)	243,857		(191,000	)
Net earnings (loss)	$	228,666		(238,504	)	377,140		(327,272	)
Earnings (loss) per share:
Basic	$	.07		(.08	)	.12		(.11	)
Diluted	$	.07		(.08	)	.12		(.11	)
Shares used in computing earnings (loss) per share:
Basic		3,126,630		3,070,451		3,113,173		3,057,167
Diluted		3,126,630		3,070,451		3,113,173		3,057,167

See accompanying Notes to Condensed Financial Statements.

-1 -

PROVENA FOODS INC.

~~CONDENSED~~Condensed ~~BALANCE~~Balance ~~SHEETS~~ Sheets(Unaudited)

(Unaudited)

	June 30, 2003		December 31, 2002


Assets
Current assets:
Cash and cash equivalents	$	140,994	350,433
Accounts receivable, less allowance for doubtful accounts of $0 at 2003 and 2002		3,146,516	2,772,039
Inventories		4,315,172	2,944,123
Prepaid expenses		213,742	41,829
Deferred tax assets		139,130	139,130

Total current assets		7,955,554	6,247,554

Property and equipment, net		16,088,950	15,587,363
Other assets		235,858	232,095
Deferred tax assets, net of current		89,054	89,054

	$	24,369,416	22,156,066


Liabilities and Shareholders’ Equity
Current liabilities:
Line of credit	$	4,000,000	2,922,729
Current portion of long-term debt		503,888	495,285
Current portion of capital lease obligation		48,180	113,200
Accounts payable		1,756,308	1,293,481
Accrued liabilities		1,580,798	1,123,138
Deferred tax liability		46,394	46,394
Income taxes payable		39,570	—

Total current liabilities		7,975,138	5,994,227

Long-term debt, net of current portion		5,603,273	5,903,883
Capital lease obligation, net of current portion		413,560	372,625
Note payable		375,000	—
Deferred tax liability, net of current		370,408	370,408
Shareholders’ equity:
Capital stock, no par value; authorized 10,000,000 shares; issued and outstanding 3,182,363 at 2003 and 3,147,087 at 2002		5,101,783	5,059,234
Retained earnings		4,530,254	4,455,689

Total shareholders’ equity		9,632,037	9,514,923

	$	24,369,416	22,156,066

ASSETS	September 30, 2002		December 31, 2001
Current assets:
Cash and cash equivalents	$	66,926	206,777
Accounts receivable, less allowance for doubtful accounts of $91,225 at 2002 and $0 at 2001		3,616,185	3,238,935
Inventories		3,270,815	3,190,660
Prepaid expenses		73,985	12,443
Prepaid tax		15,000	—
Deferred tax assets		106,203	106,203
Total current assets		7,149,114	6,755,018
Property and equipment, net		15,611,070	16,128,662
Other assets		237,714	181,268
Deferred tax assets, net of current		142,057	328,884
	$	23,139,955	23,393,832
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Line of credit	$	3,259,195	4,000,000
Current portion of long-term debt		495,285	495,285
Current portion of capital lease obligation		113,200	113,200
Accounts payable		1,561,271	1,362,058
Accrued liabilities		1,530,318	1,229,273
Deferred tax liability		46,394	46,394
Total current liabilities		7,005,663	7,246,210
Long-term debt, net of current portion		6,006,779	6,395,906
Capital lease obligation, net of current portion		394,446	453,628
Deferred tax liability, net of current		416,802	416,802
Shareholders’ equity:
Capital stock, no par value; authorized 10,000,000 shares; issued and outstanding 3,131,646 at 2002 and 3,089,516 at 2001		5,041,178	4,983,339
Retained earnings		4,275,087	3,897,947
Total shareholders’ equity		9,316,265	8,881,286
	$	23,139,955	23,393,832

See accompanying Notes to Condensed Financial Statements.

-2 -

PROVENA FOODS INC.

~~CONDENSED~~Condensed ~~STATEMENTS~~Statements OFof ~~CASH~~Cash ~~FLOWS~~ Flows(Unaudited)

(Unaudited)

	Six Months Ended June 30,

	2003			2002

Cash flows from operating activities:
Net earnings	$	74,565		148,473
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization		402,575		400,018
Change in allowance for doubtful accounts		—		37,225
Decrease (increase) in accounts receivable		(374,477	)	81,230
Increase in inventories		(1,371,049	)	(307,108	)
Increase in prepaid expenses		(171,913	)	(101,851	)
Increase in other assets		(3,763	)	(3,763	)
Increase (decrease) in accounts payable		462,827		(34,630	)
Increase in accrued liabilities		457,660		121,486
Increase in income taxes payable		39,570		97,000
Decrease in deferred tax assets		—		186,827

Net cash provided by (used in) operating activities		(484,005	)	624,907

Cash flows from investing activities:
Additions to property and equipment		(904,162	)	(54,451	)

Net cash used in investing activities		(904,162	)	(54,451	)

Cash flows from financing activities:
Payments on long term debt		(292,007	)	(286,317	)
Payments on capital lease obligation		(24,085	)	(50,600	)
Proceeds from (repayments of) line of credit		1,077,271		(399,445	)
Proceeds from sale of capital stock		42,549		40,521
Proceeds from note payable		375,000		—

Net cash provided by (used in)financing activities		1,178,728		(695,841	)

Net decrease in cash and cash equivalents		(209,439	)	(125,385	)
Cash and cash equivalents at beginning of period		350,433		206,777

Cash and cash equivalents at end of period	$	140,994		81,392

Supplemental disclosures of cash flow information:
Cash paid (received) during the period for:
Interest	$	228,290		261,715
Income taxes	$	(6,391	)	(101,970	)

	Nine Months Ended September 30,
	2002			2001
Cash flows from operating activities:
Net earnings (loss)	$	377,140		(327,272	)
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		603,365		547,838
Change in allowance for doubtful accounts		91,225		(39,000	)
Increase in accounts receivable		(468,475	)	(990,256	)
Increase in inventories		(80,155	)	(759,135	)
Increase in prepaid expenses		(61,542	)	(1,436	)
Increase in prepaid tax		(15,000	)	—
Decrease in income taxes receivable		—		185,597
Increase (decrease) in other assets		(56,446	)	4,279
Increase in accounts payable		199,213		501,972
Increase in accrued liabilities		301,045		366,726
Decrease in deferred tax assets		186,827		—
Net cash provided by (used in) operating activities		1,077,197		(510,687	)
Cash flows from investing activities:
Additions to property and equipment		(85,773	)	(344,525	)
Net cash used in investing activities		(85,773	)	(344,525	)
Cash flows from financing activities:
Payments on long-term debt		(389,128	)	(334,087	)
Payments on capital lease obligation		(59,181	)	—
Proceeds from (repayments of) line of credit		(740,805	)	1,261,226
Proceeds from sale of capital stock		57,839		73,710
Cash dividends paid		—		(183,304	)
Net cash provided by (used in) financing activities		(1,131,275	)	817,545
Net decrease in cash and cash equivalents		(139,851	)	(37,667	)
Cash and cash equivalents at beginning of period		206,777		88,585
Cash and cash equivalents at end of period	$	66,926		50,918
Supplemental disclosures of cash flow information:
Cash paid (received) during the period for:
Interest	$	414,069		544,102
Income taxes	$	72,030		(376,597	)

See accompanying Notes to Condensed Financial Statements.

-3 -

PROVENA FOODS INC.

~~NOTES~~Notes TOto ~~CONDENSED~~Condensed ~~FINANCIAL~~Financial ~~STATEMENTS~~ Statements

~~September~~June 30, ~~2002~~2003 and ~~2001~~2002 (Unaudited)

(1) Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with the requirements of Form 10-Q and, therefore, do not include all information and footnotes which would be presented ~~were~~if such financial statements were prepared in accordance with ~~generally accepted~~ accounting principles generally accepted in the United States ~~of America~~ for annual financial statement purposes. These statements should be read in conjunction with the audited financial statements presented in the Company’s Form 10-K for the year ended December 31, ~~2001~~2002. In the opinion of management, the accompanying financial statements reflect all adjustments which are necessary for a fair presentation of the results for the interim periods presented. Such adjustments consisted only of normal recurring items. The results of operations for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2002~~2003 are not necessarily indicative of results to be expected for the full year.

(2) Inventories

Inventories at ~~September~~June 30, ~~2002~~2003 and December 31, ~~2001~~2002 consist of:

	2002		2001
	2003		2002
Raw materials	$	1,~~135~~460,~~826~~311	1,~~393~~128,~~975~~576
Work-in-process		~~702~~895,~~345~~830	~~842~~705,~~577~~993
Finished goods		1,~~432~~959,~~644~~031	~~954~~1,~~108~~109,554
	$	34,~~270~~315,~~815~~172	32,~~190~~944,~~660~~123

(3) Segment Data

Business segment sales and operating income (loss) for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2002~~2003 and ~~2001~~2002 and assets at ~~September~~June 30, ~~2002~~2003 and December 31, ~~2001~~2002 are as follows:

	Three Months Ended September 30,							Nine Months Ended September 30,
	Three Months Ended June 30,					Six Months Ended June 30,
	2002				2001			2002		2001
	2003			2002		2003		2002
Net sales to unaffiliated customers:
Swiss American Sausage division	$	87,~~377~~976,~~048~~641		7,580,949	~~8,331,471~~	15,559,410		2415,~~135~~758,~~594~~546		~~21,476,361~~
Royal-Angelus Macaroni division		1,~~348~~252,~~861~~002		1,322,258	~~1,426,018~~	2,681,574		42,~~265~~916,~~582~~721		~~3,925,304~~
Total sales	$	9,725,909			9,757,489			28,401,176		25,401,665
Total net sales	$	9,228,643		8,903,207		18,240,984		18,675,267
Operating income (loss):
Swiss American Sausage division	$	~~646~~201,~~299~~286		332,871	~~(176,155~~	)374,831		1540,~~187,268~~969		~~309,544~~
Royal-Angelus Macaroni division		(~~181~~186,~~148~~772	)	(161,659	~~(100,938~~)	)(269,679	)	(~~434~~253,~~633~~485	)	~~(450,556~~	)
Corporate		949,~~616~~819		57,281	~~(7,583~~	)92,075		~~109~~100,~~788~~172		~~(6,229~~	)
Operating income (loss)	$	474,767			(284,676	)		862,423		(147,241	)
Operating income	$	64,333		228,493		197,227		387,656
	September 30, 2002				December 31, 2001
Identifiable assets:
Swiss American Sausage division	$	18,770,772			18,428,801
Royal-Angelus Macaroni division		3,982,921			4,328,435
Corporate		386,262			636,596
Total assets	$	23,139,955			23,393,832

(4) Earnings (Loss) per Share

	June 30, 2003		December 31, 2002

Identifiable assets:
Swiss American Sausage division	$	19,473,404	17,709,638
Royal-Angelus Macaroni division		4,282,598	3,842,313
Corporate		613,414	604,115

Total assets	$	24,369,416	22,156,066

Basic earnings (loss) per share are net earnings (loss) divided by the weighted average number of common shares outstanding during the period, and diluted earnings (loss) per share are net earnings (loss) divided by the sum of the weighted average plus an incremental number of shares attributable to outstanding options. Options for 107,111 shares were not used in the calculations for the following periods because their effect would be antidilutive. -4-

	Three Months Ended September 30,				Nine Months Ended September 30,
	2002		2001		2002	2001
Net earnings (loss)	$	228,666	(238,504	)	377,140	(327,272	)
Weighted average number of shares		3,126,630	3,070,451		3,113,173	3,057,167
Incremental shares for options		—	—		—	—
Weighted average plus incremental shares		3,126,630	3,070,451		3,113,173	3,057,167
Basic earnings (loss) per share	$	.07	(.08	)	.12	(.11	)
Diluted earnings (loss) per share	$	.07	(.08	)	.12	(.11	)

(4) Net Earnings and Earnings per Share

In accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” the Company has not reported compensation expense for its grants of stock options. Had the Company reported the fair value at the date of grant as compensation expense under Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” the Company’s net earnings would have been the pro forma amounts set forth below. Basic earnings per share are net earnings divided by the weighted average number of common shares outstanding during the period, and diluted earnings per share are net earnings divided by the sum of the weighted average plus an incremental number of shares attributable to outstanding options. Options for 107,111 shares were not used for the diluted earnings calculations below because their effect was anti-dilutive.

	Three Months Ended June 30,			Six Months Ended June 30,

	2003		2002	2003	2002

Net earnings, as reported	$	7,883	92,767	74,565	148,473
Net stock-based compensation expense		—	—	—	—

Pro forma net earnings		7,883	92,767	74,565	148,473

Weighted average number of shares		3,175,981	3,113,228	3,166,923	3,106,333
Incremental shares for options		—	—	—	—

Weighted average plus incremental shares		3,175,981	3,113,228	3,166,923	3,106,333

Earnings per share: Basic - as reported	$	.00	.03	.02	.05

Basic - pro forma	$	.00	.03	.02	.05

Diluted - as reported	$	.00	.03	.02	.05

Diluted - pro forma	$	.00	.03	.02	.05

(5) Debt

The Company has short-term and long-term debt agreements consisting of a line of credit, various equipment loans, real estate loans and Industrial Development Revenue Bonds (“IDRB”).

Under the line of credit, equipment and real estate loan agreements, the Company is required to meet certain financial and non-financial covenants. For the quarter ended June 30, 2003, the Company was not in compliance with the working capital covenant, and the bank has waived the default for the quarter. The Company believes it is probable that it will be in compliance for the next 12 months.

The IDRB debt is secured by a letter of credit that expires in October 2003. The Company has entered into an agreement to extend the letter of credit until October 2008.

In June 2003, the Company issued a $375,000 short-term note for the purchase of certain equipment for the pasta division. The note bears interest at 9% per annum and is due in December 2003. In July 2003, the Company entered into an agreement to refinance the short-term note on a five-year basis. Accordingly, the Company has classified the note payable as long-term in the accompanying June 30, 2003 balance sheet.

-5-

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Results of Operations	Three Months Ended June 30,				Six Months Ended June 30,

(Unaudited)	2003		2002		2003		2002

	(amounts in thousands)
Net sales by division:
Swiss American	$	7,976	$	7,581	$	15,559	$	15,758
Royal-Angelus		1,253		1,322		2,682		2,917

Total	$	9,229	$	8,903	$	18,241	$	18,675

Sales in thousands of pounds by division:
Swiss American		5,309		5,094		10,584		10,521
Royal-Angelus		2,317		2,519		5,133		5,333

	Three Months Ended September 30				Nine Months Ended September 30
	2002		2001		2002		2001
	(Unaudited)
	(amounts in thousands)
Net sales by division:
Swiss American	$	8,377	$	8,331	$	24,135	$	21,476
Royal Angelus		1,349		1,426		4,266		3,926
Total	$	9,726	$	9,757	$	28,401	$	25,402
Sales in thousands of pounds by division:
Swiss American		5,985		5,279		16,506		14,220
Royal Angelus		2,577		2,969		7,910		8,056

Forward-Looking Statements

The following discussion may contain “forward-looking statements” that express or imply expectations of future performance, developments or occurrences. Actual events may differ materially from these expectations due to uncertainties relating to the economy, competition, demand, commodities, credit markets, energy supplies and other factors.

Swiss American Sausage Co. Meat Division (“Swiss”)

Sales by the processed meat division ~~increased 12~~decreased about 1% in dollars and ~~16%~~increased about 1% in pounds in the 1st ~~nine~~six months of ~~2002~~2003 and ~~were~~increased ~~essentially~~5% ~~the same~~ in dollars ~~but~~and ~~increased 13~~4% in pounds in the ~~3rd~~2nd quarter of ~~2002~~2003, compared to the same periods of ~~2001~~2002. ~~Sales~~The differences in percent changes of dollars and pounds ~~increased~~resulted ~~proportionately~~from ~~more~~changes in prices ~~than~~reflecting changes in ~~dollars~~meat ~~because~~costs, which increased during the 1st six months of ~~lower~~2003 ~~selling~~but ~~prices~~decreased ~~reflecting~~during ~~lower~~the ~~meat~~1st ~~costs~~six months of 2002. Swiss operated at a $1374,~~187,268~~831 profit for the 1st ~~nine~~six months of ~~2002~~2003 compared to a $~~309~~540,~~544~~969 profit for the 1st ~~nine~~ six months of ~~2001~~2002, and at a $~~646~~201,~~299~~286 profit for the ~~3rd~~ 2nd quarter of ~~2002~~2003 compared to a $~~176~~332,~~155~~871 ~~loss~~profit for the ~~3rd~~2nd quarter of ~~2001~~2002. ~~The~~Reduced ~~profit~~profits ~~improvements~~were ~~resulted~~caused ~~from~~primarily aby ~~combination~~higher ofworkers ~~increased~~compensation ~~sales~~insurance ~~and~~costs, ~~favorable~~higher ~~meat~~freight ~~cost fluctuations. Meat~~ costs ~~were~~from ~~predominately lower and decreasing during 2002 as~~greater ~~opposed~~shipping todistances, ~~higher~~ and ~~increasing~~meat ~~during~~cost ~~the~~increases ~~1st~~outpacing ~~nine~~increases ~~months~~in ofselling ~~2001~~prices.

Royal-Angelus Macaroni Company Pasta Division (“Royal”)

The pasta division’s sales ~~increased~~ decreased about 98% in dollars ~~but~~and ~~decreased 2~~4% in pounds in the 1st ~~nine~~half ~~months~~ of ~~2002~~2003 and decreased 5% in dollars and 136% in pounds in the ~~3rd~~2nd quarter of ~~2002~~2003, compared to the same periods of ~~2001~~2002. ~~Sales~~The ingreater ~~pounds~~percent ~~decreased without commensurate~~ decreases in dollars ~~because~~than ofpounds ~~higher~~in ~~selling prices reflecting higher flour costs. Royal operated at a $434,633 loss for~~ the 1st ~~nine~~half ~~months~~ of ~~2002~~2003 ~~compared~~reflect toaggressive apricing ~~$450,556~~at loss for the 1st nine months of 2001 and a $181,148 loss for the 3rd quarter of 2002 compared to a $100,938 loss for the 3rd quarter of 2001. The increased loss in the 3rd quarter of 2002 resulted from a combination of lower sales and lower gross margins compared to the same period of 2001. Royal ~~continues to struggle as sales and~~directed ~~operating~~toward ~~results~~meeting ~~are adversely affected by~~ competition ~~resulting from increased industry capacity,~~ and ~~is intensifying its efforts to seek personnel experienced in pasta sales and production, to aggressively pursue sales opportunities and to improve margins.~~ maintaining

5 -6-

volume and the greater percent decreases in pounds than dollars in the 2nd quarter reflect higher average selling prices due to product mix variations and higher flour costs. Royal operated at a $269,679 loss for the 1st half of 2003 compared to a $253,485 loss for 1st half of 2002 and a $186,772 loss for the 2nd quarter of 2003 compared to a $161,659 loss for the 2nd quarter of 2002. Sales and operating results continue to be adversely affected by competition resulting from increased industry capacity. Some of the causes of the increased losses were decreased sales, aggressive pricing, increasing flour costs, the increased cost of an additional salesman and increased workers compensation insurance cost.

The Company

Company sales were updown 122% in the 1st ~~nine~~half ~~months~~ of ~~2002~~2003 compared to the 1st ~~nine~~half ~~months~~ of ~~2001~~2002 and were ~~essentially~~up ~~the~~4% ~~same~~ in the ~~3rd~~2nd quarter of ~~2002~~2003 compared to the ~~3rd~~2nd quarter of ~~2001~~2002. The Company realized net earnings of $~~377~~74,~~140~~565 for the 1st ~~nine~~half ~~months~~ of ~~2001~~2003 compared to a net ~~loss~~earnings of $~~327~~148,~~272~~473 a year ago and net earnings of $~~228~~7,~~666~~883 for the ~~3rd~~2nd quarter of ~~2002~~2003 compared to a net ~~loss~~earnings of $~~238~~92,~~504~~767 a year ago. Both ~~Swiss~~divisions ~~accounted~~contributed ~~for~~to ~~substantially~~decreases ~~all~~in ofearnings in both periods and the ~~increased~~decrease in sales ~~and~~in ~~earnings~~the 1st half, with Swiss providing the increase in sales in the 2nd quarter. The Company’s gross margins for the 1st ~~nine~~half ~~months~~ and ~~3rd~~2nd quarter of ~~2002~~ 2003 were 1110.65% and ~~13.~~9.7%, respectively, compared to 710.94% and 410.39% a year ago. ~~Swiss’s~~The ~~gross~~major ~~margins~~cause ~~were~~of ~~higher for both periods, whereas Royal’s were higher for~~ the ~~nine~~decline ~~months~~in ~~but~~Company ~~lower~~margins ~~for~~in the ~~3rd~~2nd quarter, ~~all~~was ~~comparing~~a ~~periods~~decrease in ~~2002 to the same periods in 2001. Swiss’s~~ margins ~~were~~at ~~higher because of increased sales and favorable meat cost fluctuations.~~ Royal’s ~~margins~~from ~~were~~aggressive ~~higher~~pricing ~~for the 1st nine months because of higher average selling prices, but were lower for the 3rd quarter because of lower plant utilization on lower sales~~ and ~~higher~~increasing flour costs.

General and administrative expense was updown about $~~266~~11,000 for the 1st ~~nine~~half ~~months~~ of ~~2002~~2003 and up about $~~159~~6,000 in the ~~3rd~~2nd quarter of ~~2002~~2003, compared to the same periods in ~~2001,~~2002. ~~due~~The changes reflect reductions in ~~part~~health toinsurance ~~increases~~costs inand bad debt expense, ~~health~~partially ~~benefit~~or ~~costs~~wholly offset by increases in payroll, ~~outside~~directors’ ~~services~~fees, dues and ~~bank charges~~outside services. Distribution expense was up about $7184,000 for the 1st ~~nine~~half ~~months~~ and up about $1484,000 for the 2nd ~~3rd~~ quarter without significant changes in sales because of increased ~~freight~~salesman onpayroll, increased ~~sales~~advertising and ~~increased~~freight ~~liability~~at ~~insurance~~Swiss ~~expense,~~and ~~offset~~increased byworkers ~~lower~~compensation ~~salesman~~insurance ~~expense and advertising~~costs. Net interest expense decreased about $~~124~~34,000 for the 1st ~~nine~~half ~~months~~of 2003 and decreased about $1719,000 for the ~~3rd~~2nd quarter of ~~2002~~2003 because of lower interest rates and lower long-term debt, in spite of higher borrowings. ~~Other~~under ~~income~~the ~~increased~~bank ~~for~~line of credit and interest on the ~~1st~~note ~~nine~~payable ~~months~~incurred in ~~part~~the ~~because~~purchase of ~~increased~~a ~~rental~~long ~~income~~goods atline. ~~Royal,~~Other ~~but~~income ~~decreased~~increased ~~for~~primarily ~~the~~because ~~3rd~~of ~~quarter~~insurance ~~primarily~~proceeds ~~because~~from ofan ~~reduced~~ingredient ~~waste~~vendor’s ~~product~~carrier ~~sales~~for ata ~~Swiss.~~scrapped product batch.

Meat plant employees are represented by United Food and Commercial Workers Union, Local 588, ~~AFL_CIO~~AFL-CIO, CLC under a collective bargaining agreement dated April 1, 2002 which expires April 2, 2006. Pasta plant employees are represented by United Food and Commercial Workers Union, Local 1428, ~~AFL_CIO~~AFL-CIO, CLC under a collective bargaining agreement ~~which~~dated ~~expired~~October ~~September 29~~2, 2002 ~~and for~~ which aexpires ~~four~~September ~~year extension has been negotiated~~30, ~~subject to ratification~~2006. There has been no significant labor unrest at the ~~Company~~division’s plants and the Company believes it has a satisfactory relationship with its employees.

~~Liquidity and Capital Resources~~ -7-

The Company has generally satisfied its normal working capital requirements with funds derived from operations and borrowings under its bank line of credit, which is part of a credit facility with Comerica Bank-California. The line of credit is payable on demand, is subject to annual review, and bears interest at a variable annual rate which is 0.75% over the bank’s “Base Rate” if working capital exceeds $50,000 and tangible net worth exceeds $8,750,000 and 1.75% over the Base Rate otherwise. The variable rate decreased from 1.75% to 0.75% over the Base Rate on September 1, 2002. The maximum amount of the line of credit is the lesser of $4,000,000, or 30% of inventories plus 80% of eligible receivables, with a limit of $1,000,000 for inventories, determined monthly. At September 30, 2002 the Base Rate was 4.75% per annum,

~~30%~~ Liquidity ~~of inventories was $981,245~~ and ~~80%~~Capital ~~of eligible receivables was $2,851,148 for a total maximum of $3,823,393 and the Company had $3,259,195 of borrowings outstanding under the bank line of credit.~~ Resources

AsThe ~~part~~Company ofhas ~~the~~generally ~~credit~~satisfied ~~facility,~~its ~~Comerica~~normal ~~Bank-California issued~~working acapital ~~$4,060,000~~requirements ~~letter~~with offunds ~~credit~~derived tofrom ~~support~~operations ~~$4,000,000~~and borrowings under its bank line of ~~industrial~~credit, ~~development~~which ~~bonds~~is ~~issued~~part inof ~~1998~~a ~~for~~credit ~~costs~~facility ~~relating~~with toComerica ~~the~~Bank-California. ~~construction~~The line of ~~the~~credit, ~~Company’s~~as ~~meat~~modified ~~plant.~~effective ~~The~~June ~~bonds~~3, ~~bear~~2003, ais ~~variable~~payable ~~rate~~on ofdemand, ~~interest~~is ~~payable~~subject ~~monthly~~to annual review, and ~~set weekly~~bears interest at a ~~market~~variable annual rate—1 of 0.775% ~~per~~over ~~annum~~the atbank’s ~~September~~“Base ~~30, 2002~~Rate.” The ~~Company~~maximum ~~pays~~amount aof ~~1.5%~~the ~~per~~line ~~annum~~of ~~fee~~credit onis the ~~amount~~lesser of ~~the~~$4,000,000, ~~letter~~or 45% of ~~credit~~inventories ~~and~~plus ~~fees~~80% of ~~the~~receivables, ~~bond~~with ~~trustee~~a ~~estimated~~limit ~~at 0.5%~~ of ~~the~~$1,700,000 ~~bond~~for ~~principal~~inventories, ~~per~~determined ~~year~~monthly. ~~Monthly~~The inventories ~~payments~~percent ofand ~~bond principal~~limit ~~into~~change ato ~~sinking~~30% ~~fund~~and ~~began~~$1,000,000 ~~May~~at August 1, ~~2000,~~2003. ~~totaled~~At ~~$76~~June 30,~~700~~ 2003 the ~~first~~“Base ~~year~~Rate” ~~and~~was ~~increase about 5~~4.600% ~~each~~per ~~year~~annum, ~~until~~the ~~May~~maximum 1,amount ~~2022,~~of ~~when~~the line of credit was $~~813~~4,~~500~~000,000 ofand ~~remaining~~the ~~principal~~Company ishad ~~payable~~$4,000,000 inof 18borrowings ~~equal~~under the ~~monthly~~bank ~~payments.~~line of credit.

As part of the credit facility, Comerica Bank-California issued a $4,060,000 letter of credit to support $4,000,000 of industrial development bonds issued in 1998 for costs relating to the construction of the Company’s meat plant. The bonds bear a variable rate of interest payable monthly and set weekly at a market rate - 1.1% per annum at June 30, 2003. The Company pays a 1.5% per annum fee on the amount of the letter of credit and fees of the bond trustee estimated at 0.5% of the bond principal per year. Monthly payments of bond principal into a sinking fund began May 1, 2000, total $76,700 the first year and increase about 5.6% each year until May 1, 2022, when $813,500 of remaining principal is payable in 18 equal monthly payments. The $4,060,000 letter of credit expires October 15, 2003, and the Company is obligated to maintain a like letter of credit until the bonds mature. Comerica was not obligated to extend the letter of credit but has agreed to extend it until October 2008.

Also as part of the credit facility, the bank made four loans to the Company for the meat plant, a $1,280,000 real estate loan and three equipment loans totalling $2,614,788. The real estate loan was made in December 1999, bears a fixed rate of interest of 9.1% per annum and is payable in equal monthly payments of principal and interest over its 25 year term. Each equipment loan bears a variable rate of interest and is payable in equal monthly payments of principal plus interest over its term, with issue date, initial amount, term and rate as follows: July 1999, $1,000,000, 7 year, bank’s “Base Rate”; September 1999, $1,200,000, 7 year, bank’s “Base Rate” plus 0.25%; and December 1999, $414,788, 5 year, bank’s “Base Rate” plus 0.75%.

All parts of the credit facility are secured by substantially all of the Company’s assets, including accounts receivable, inventory, equipment and fixtures, the Company’s two pasta buildings and the meat plant, none of which is otherwise encumbered. The credit facility prohibits mergers, acquisitions, purchase or disposal of assets, borrowing, granting security interests, and changes of management and requires a tangible net worth greater than $89,~~900~~500,000, increasing by ~~$200,000~~50% ~~each~~of ~~quarter~~net ~~after~~income ~~June~~per 30year beginning with the year ending December 31, ~~2002~~2003; working capital not less than ~~negative~~ $~~425,000~~0 increasing by $200,000 ~~each~~at ~~quarter~~December ~~after~~31, ~~June~~2003 30and $50,000 ~~2002~~each quarter thereafter; a debt ~~service~~to ~~coverage~~tangible ~~not~~net ~~less than~~worth ~~1.3;~~ratio ~~and~~of ~~quarterly~~not ~~dividends~~more ~~not~~than ~~exceeding~~2; ~~the~~and ~~net~~debt ~~income~~service ofcoverage ~~the~~not ~~prior~~less ~~quarter~~than 1.3. The Company was in ~~compliance~~default ~~with~~under the ~~covenants~~working capital covenant at ~~September~~June 30, ~~2002~~2003 and ~~expects~~the bank has waived the default. The Company expects to be in compliance with all covenants at September 30 and December 31, ~~2002~~2003.

Cash decreased $139,851 in the 1st nine months of 2002 compared to a $37,667 decrease in the 1st nine months of 2001. Operating activities provided $1,077,197 of cash primarily from net earnings, depreciation and amortization, increases in accounts payable, accrued liabilities and income taxes payable and a decrease in deferred tax assets, partially offset by an increase in accounts receivable and smaller increases in inventories, prepaid expenses, prepaid taxes and other assets. Accounts receivable and inventories increased as a result of increased sales. Investing activities used $85,773 of cash for modest additions to property and equipment, and financing activities used $1,131,275 of cash for payments on long term debt and the capital lease obligation and repayments of the bank line of credit. -8-

Cash decreased $209,439 in the 1st half of 2003 compared to a $125,385 decrease in the 1st half of 2002. Operating activities used $484,005 of cash primarily from increases in accounts receivable, inventories and prepaid expenses, partially offset by net earnings, depreciation and amortization, and increases in accounts payable, accrued liabilities and income taxes payable. The increase in accounts receivable resulted from increased sales in the 2nd quarter of 2003 and customers taking slightly longer to pay, without any significant change in the aging of accounts receivable. Inventories increased because both meat and flour costs are up from a year ago and because Swiss has increased the inventories it carries in anticipation of customers’ needs. Prepaid expenses are up primarily because of a workers compensation insurance deposit. Investing activities used $904,162 of cash for additions to property and equipment, primarily a second long goods line for Royal, and financing activities provided $1,178,728 of cash primarily from increased borrowing under the bank line and the note payable incurred in the purchase of the long goods line, offset by payments on the long-term debt and the capital lease obligation.

The Company purchased a second used long goods line for the pasta division in the 2nd quarter of 2003. The line was disassembled and shipped to Royal’s plant with delivery completed in early July 2003. The estimated total cost of the line is approximately $1,000,000 and the line is expected to be operational by the end of 2003. The Company has financed the acquisition of the line with cash borrowed under the line of credit and a $375,000 short term note to the seller and is seeking an equipment loan for a major part of the cost. The second line is more modern and is expected to produce high quality goods faster and more efficiently than Royal’s existing line. The addition of a second line will enable Royal to produce two long goods products at the same time and reduce change-overs.

Commitments and Contingencies

The following table shows the long-term debt principal and capital lease obligation payments due in the specified periods. The lease payments are estimates because they are proportional to pounds of a product sold.

	Three Months Ending December 31,			Year Ending December 31,				Thereafter
			Six Months Ending December 31,	Year Ending December 31,
	Totals		2002	2003	2004	2005	2006
(amounts in thousands)	Totals		2003	2004	2005	2006	2007	Thereafter
	(amounts in thousands)
Long-Term Debt	$	6,107	253	504	435	340	137	4,438
Long-Term Debt	$	6,605	106	504	504	435	341	4,612
Capital Lease Obligation		462	24	49	48	48	48	245
Capital Lease Obligation		516	34	113	113	113	115	-0-
Totals	$	6,569	277	553	483	388	185	4,683
Totals	$	7,121	140	617	617	548	456	4,612

The Company expects that its operations and bank line of credit will provide adequate working capital to satisfy the normal needs of its operations for the foreseeable future, including cash flow to service its debt.

The Company believes that it has a good relationship with Comerica Bank-California, as evidenced by the bank’s previous over-advances under the line of credit, waivers in prior years of defaults under the financial covenants and modifications of the financial covenants. That relationship is crucial to the Company, because the line of credit is payable on demand, the Company could not make an immediate repayment of the line of credit, and a failure to repay the line after demand would render the entire credit facility in default. As a result, ~~neither a default under a financial covenant nor~~ the bank’s ~~waiver~~has ~~of such a default affects~~ the ~~bank’s~~ power to ~~cause~~require that the credit facility to be ~~in default and require that it be~~ restructured or refinanced. ~~The Company was in compliance with the financial covenants at September 30, 2002.~~

-9-

Critical Accounting Policies

InThe ~~December 2001, the~~ Securities and Exchange Commission ~~requested~~defines ~~that all registrants list their most “critical accounting policies” in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and indicated that~~ a “critical accounting policy” isas one which is both important to the portrayal of the registrant’s financial condition and results of operations and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Critical for the Company isare determining the allowance for doubtful accounts ~~because of the risk of failing to foresee a major credit loss,~~ and ~~inventory~~valuing ~~valuation when~~ inventory ~~cost may exceed fair value less cost to sell because of the difficulty of determining the latter~~.

Allowance for Doubtful Accounts. The Company sells to its customers on credit and grants credit to those who are deemed credit worthy based on the Company’s analysis of their credit history. The Company’s standard payment terms are net 30 days. The Company reviews its accounts receivable balances and the collectibility of those balances on a periodic basis. Based on the Company’s analysis of the length of time that the balances have been outstanding, the pattern of customer payments, its understanding of the general business conditions of its customers and its communications with its customers, the Company estimates the recoverability of those balances. When recoverability is uncertain and the unrecoverable amounts can be reasonably estimated, the Company records bad debt expense and increases the allowance for accounts receivable by the amounts estimated to be unrecoverable. If the data the Company uses to assist in the calculation of the allowance for doubtful accounts does not reflect its future ability to collect outstanding receivables, additional provisions for doubtful accounts may be needed and the Company’s future results of operations could be materially affected. At June 30, 2003, the Company had no allowance for doubtful accounts because based on the factors stated above, there is no indication that any receivables are uncollectible.

Inventory. Inventory is valued at the lower of cost or market, where market is generally the fair value less the cost to sell. The Company reviews the carrying value of its inventory on a periodic basis by determining the market value for the items in inventory and comparing the market value to the carrying value. In instances where the market value is lower than the carrying value, the Company writes down the inventory accordingly. If circumstances change (e.g. unexpected shifts in market demand) there could be a material impact on the net realizable value of the inventory.

Estimates involving critical accounting policies are based on historical data and anticipated future events, and actual results may differ from the Company’s estimates.

New Accounting Standards

The Financial Accounting Standards Board in ~~June~~July ~~2001~~2002 issued Statement of Financial Accounting Standards (“SFAS”) No. ~~141,~~146 “~~Business~~Accounting ~~Combinations”~~for ~~applicable~~Costs toAssociated ~~business~~with ~~combinations~~Exit ~~initiated~~or ~~after~~Disposal ~~June~~Activities” ~~30,~~effective ~~2001,~~December ~~SFAS No. 142~~31, ~~“Goodwill~~2002; ~~and~~in ~~Other~~November ~~Intangible Assets” effective January 1,~~ 2002 ~~and~~issued ~~SFAS~~Interpretation No. ~~143~~45, “Guarantor’s Accounting and Disclosure Requirements for ~~Asset~~Guarantees, ~~Retirement~~Including Indirect ~~Obligations”~~Guarantees ~~effective~~of ~~January~~indebtedness 1,of ~~2003~~Others”; and in ~~August~~December ~~2001~~2002 issued SFAS No. ~~144~~148, “Accounting for ~~the~~Stock-Based ~~Impairment~~Compensation or- ~~Disposal~~Transition ofand ~~Long-Lived Assets~~Disclosure” effective ~~January~~December 115, 2002;. inThese ~~April~~standards ~~2002~~and ~~issued~~interpretations ~~SFAS~~are adopted ~~No.~~by ~~145,~~the ~~“Rescission~~Company ofas ~~FASB~~they ~~Statements~~become ~~No.~~effective 4and, 44in the opinion of management, have not had and 64will not have a material effect on the Company’s financial position, ~~Amendment~~results of operations or liquidity.

8 -10-

~~FASB~~ITEM ~~Statement No~~3. ~~13,~~QUANTITATIVE ~~and~~AND ~~Technical~~QUALITATIVE ~~Corrections”~~DISCLOSURES ~~effective~~ABOUT ~~May~~MARKET 15, 2002; and in July 2002 issued SFAS No. 146 “Accounting for Costs Associated with Exit or Disposal Activities” effective December 31, 2002. These standards are adopted by the Company as they become effective and, in the opinion of management, have not had and will not have a material effect on the Company’s financial position, results of operations or liquidity. RISK

~~ITEM~~The 3industrial development bonds, the bank line of credit, and the equipment loans bear variable rates of interest (see Liquidity and Capital Resources under Item 2. ~~QUANTITATIVE~~Management’s ~~AND~~Discussion ~~QUALITATIVE~~and ~~DISCLOSURE~~Analysis ~~ABOUT~~of ~~MARKET~~Financial ~~RISK~~Condition and Results of Operations) which tend to follow market interest rates and change the Company’s interest expense in the same direction as changes in interest rates. A 1% per annum change in the rate borne by the industrial development bonds would change annual interest expense by almost $40,000. Assuming an average bank line of credit balance of $3,000,000 plus $1,200,000 average principal balance of equipment loans, a 1% per annum change in the rate borne by those borrowings would change annual interest expense by $42,000.

~~The~~ITEM ~~industrial development bonds, the bank line of credit, and the equipment loans bear variable rates of interest (see Liquidity and Capital Resources under Item 2~~4. ~~Management’s~~CONTROLS ~~Discussion~~AND and Analysis of Financial Condition and Results of Operations) which tend to follow market interest rates and change the Company’s interest expense in the same direction as changes in interest rates. A 1% per annum change in the rate borne by the industrial development bonds would change annual interest expense by almost $40,000. Assuming an average bank line of credit balance of $3,200,000 plus $1,400,000 average principal balance of equipment loans, a 1% per annum change in the rate borne by those borrowings would change annual interest expense by $46,000. PROCEDURES

ITEM 4. DISCLOSURE CONTROLS AND PROCEDURES

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures within 90 days prior to the filing of this report and have concluded that: there are no significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data; there are no material weaknesses in internal controls; and, there is no fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls. There have not been any changes in internal controls or in other factors that could significantly affect internal controls subsequent to the most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS No significant litigation.

NoITEM ~~significant litigation~~2. CHANGES IN SECURITIES None.

ITEM 23. ~~CHANGES~~DEFAULTS INUPON SENIOR SECURITIES None.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

~~None~~The Company held its annual meeting of shareholders on Tuesday, April 22, 2003, at 11:00 a.m. at the Company’s principal office. Shareholders representing 2,631,499 or 83.3% of the 3,158,210 shares entitled to vote were present in person or by proxy, with 14,233 broker non-votes. The following persons were nominated and elected directors, with votes for, withheld from specified nominees, or without authority to vote for directors, as indicated:

-11-

Nominee	For	Withheld	Without Authority

John D. Determan	2,545,618	16,838	68,543
Theodore L. Arena	2,553,552	8,904	68,543
Ronald A. Provera	2,561,256	1,200	68,543
Santo Zito	2,558,256	4,200	68,543
Thomas J. Mulroney	2,556,452	6,004	68,543
Louis A. Arena	2,561,356	1,100	68,543
Joseph W. Wolbers	2,561,456	1,000	68,543
John M. Boukather	2,562,456	-0-	68,543

ITEM 5.

OTHER INFORMATION

Common Stock Repurchase and Sale

The Company did not purchase any of its shares during the 1st ~~nine~~half ~~months~~ of ~~2002~~2003 under its stock repurchase program.

9During the 1st half of 2003, the Company sold 35,276 newly issued shares of its common stock under its 1988 Employee Stock Purchase Plan, at an average selling price of $1.21 per share. From inception of the Plan through June 30, 2003, employees have purchased a total of 703,909 shares.

During the 1st nine months of 2002 the Company sold 42,130 newly issued shares of its common stock under its 1988 Employee Stock Purchase Plan, at an average selling price of $1.37 per share. From inception of the Plan through September 30, 2002, employees have purchased a total of 653,192 shares.

American Stock Exchange Listing

The Company’s stock trades on the American Stock Exchange under the ticker symbol “PZA”.

Cash Dividends

No cash dividends were paid in the 1st ~~nine~~six months of ~~2002~~2003.

Management Stock Transactions

No purchases or sales of the Company’s common stock by officers or directors were reported during the ~~3rd~~2nd quarter of ~~2002~~ 2003.

ITEM 6.

EXHIBITS AND REPORTS ON FORM 8-K

(a) The only ~~exhibit~~exhibits filed with this report isare Exhibit ~~99.1~~31 —- Section 302 Certifications and Exhibit 32 - Section 906 ~~Certification~~Certifications.

(b) No reports on Form 8-K were filed during the three months ended ~~September~~June 30, ~~2002~~2003.

SIGNATURE

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

Date: October 26, 2002			PROVENA FOODS INC.
Date: July 31, 2003	PROVENA FOODS INC.
	By	/s/ THOMAS J. MULRONEY	By	~~Thomas J. Mulroney~~
				Vice President and Chief Financial Officer
		Thomas J. Mulroney Vice President and Chief Financial Officer

~~SECTION 302 CERTIFICATIONS~~ -12-

I, Theodore L. Arena, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Provena Foods Inc. (the “Company”);

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report;

4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and l5d-14) for the Company and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the Company, including any subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the Company’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation, to the Company’s auditors and the audit committee of Company’s Board of Directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data and have identified for the Company’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls; and

6. The Company’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: October 26, 2002

Theodore L. Arena, Chief Executive Officer

I, Thomas J. Mulroney, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Provena Foods Inc. (the “Company”);

b) evaluated the effectiveness of the Company’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

b) any fraud. whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls; and

Date: October 26, 2002

Thomas J. Mulroney, Chief Financial Officer

EXHIBIT 99.1 — SECTION 906 CERTIFICATIONS

Each of the undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Provena Foods Inc. (the “Company”), that, to his knowledge, the Quarterly Report of the Company on Form 10-Q for the period September 30, 2002, fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: October 26, 2002

Theodore L. Arena, Chief Executive Officer

Thomas J. Mulroney, Chief Financial Officer

Filing Compare · PROVENA FOODS INC