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NOTE 1 - THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All intercompany transactions have been eliminated. The carrying amount of cash and cash equivalents, accounts and other receivables, accounts payable and accrued liabilities approximate fair market value due to the short maturity of these instruments.

Business segment
The Company and its subsidiaries operate in one business segment - the manufacturing and/or distributing of refrigerated, frozen and snack food products.

Fiscal year
The Company maintains its accounting records on a 52-53 week fiscal basis. Fiscal years 1997 and 1996 include 52 weeks each. Fiscal year 1995 includes 53 weeks.

Revenues
Revenues are recognized upon product shipment or delivery to customers.

Cash equivalents
The Company considers all investments with original maturities of three months or less to be cash equivalents. Cash equivalents include treasury bills of $10,990,000 at October 31, 1997 and $5,194,000 at November 1, 1996.

Inventories
Inventories are stated at the lower of cost (determined on a first-in, first-out basis) or market.

Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation. Major renewals and betterments are charged to the asset accounts while the cost of maintenance and repairs is charged to income as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the respective accounts and the resulting gain or loss is credited or charged to income. Depreciation is computed on the straight-line basis over 10 to 20 years for buildings and improvements, 5 to 10 years for machinery and equipment and 3 to 5 years for transportation equipment.

Income taxes
Deferred taxes are provided for items whose financial and tax bases differ.

Earnings per share
Net income and cash dividends per share are calculated based on the weighted average number of shares outstanding, 10,336,415 for all periods presented, after giving effect to a 10% stock dividend declared November 10, 1997.

Reclassifications
Certain reclassifications have been made in prior years to conform to the current year presentation.

NOTE 2 - COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS: