UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

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

For the quarterly period ended December 4, 2004

OR

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

For the transition period from                      to

Commission File Number: 0-7277

PIERRE FOODS, INC.

North Carolina
(State or other jurisdiction of incorporation or organization)

56-0945643
(I.R.S. Employer Identification No.)

9990 Princeton Road
Cincinnati, Ohio 45246
(Address of principal executive offices) (zip code)

Registrant’s telephone number, including area code: (513) 874-8741

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 þ                                          No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

                                         Yes o                                          No þ

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

PIERRE FOODS, INC.

INDEX

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PIERRE FOODS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

See accompanying notes to unaudited consolidated financial statements.

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PIERRE FOODS, INC. AND SUBSIDIARIES

See accompanying notes to unaudited consolidated financial statements.

4

PIERRE FOODS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

See accompanying notes to unaudited consolidated financial statements.

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PIERRE FOODS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

See accompanying notes to unaudited consolidated financial statements.

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PIERRE FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE PERIOD FROM MARCH 6, 2004 THROUGH DECEMBER 4, 2004

See accompanying notes to unaudited consolidated financial statements.

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PIERRE FOODS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

See accompanying notes to unaudited consolidated financial statements.

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See accompanying notes to unaudited consolidated financial statements.

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PIERRE FOODS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

1. Basis of Presentation

     On June 30, 2004, the shareholders of PF Management, the sole shareholder of the Company, sold their shares of stock in PF Management (the “Acquisition”) to Pierre Holding Corp. (“Holding”), an affiliate of Madison Dearborn Partners, LLC (“MDP”).

     The financial information as of March 6, 2004 included in these financial statements has been derived from the Company’s audited consolidated financial statements. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position, the results of operations and the cash flows of the Company for the interim periods. The results of interim operations are not necessarily indicative of the results to be expected for the full fiscal year. These interim unaudited consolidated financial statements should be read in conjunction with the Company’s March 6, 2004 audited consolidated financial statements and notes thereto. The Company’s current accounting policies are consistent with those described in the notes to the Company’s March 6, 2004 audited consolidated financial statements except for stock-based compensation (see Note 2, “Stock-Based Compensation”) and goodwill and other intangible assets (see Note 6, “Goodwill and Other Intangible Assets”).

     Included in this report are interim unaudited consolidated financial statements that contain all adjustments necessary to present fairly the financial position as of December 4, 2004 and March 6, 2004, the results of operations for the thirteen week periods ended December 4, 2004 and November 29, 2003, the results of operations for the periods from March 7, 2004 through June 30, 2004 and July 1, 2004 through December 4, 2004 and the thirty-nine weeks ended November 29, 2003, and the cash flows of the Company for the periods of March 7, 2004 through June 30, 2004 and July 1, 2004 through December 4, 2004 and the thirty-nine weeks ended November 29, 2003. The thirteen week periods ended December 4, 2004 and November 29, 2003 are referred to as “successor third quarter 2005” and “predecessor third quarter 2004”, respectively. The periods from March 7, 2004 through June 30, 2004 and July 1, 2004 through December 4, 2004 and the thirty-nine weeks ended November 29, 2004 are referred to as “predecessor fiscal 2005”, “successor fiscal 2005” and “predecessor fiscal 2004”, respectively. The thirty-nine weeks ended December 4, 2004 is referred to as “predecessor fiscal 2005 and successor fiscal 2005 combined.” Financial statement presentation used for fiscal 2004 has been reclassified, where applicable, to conform to financial statement presentation used for both predecessor fiscal 2005 and successor fiscal 2005.

     The fair value adjustments related to the Acquisition, which have been pushed down to the Company from Holding primarily include adjustments in property, plant and equipment, inventory, goodwill, other intangible assets and related deferred taxes.

     The Company reports the results of its operations using a 52-53 week basis. In line with this, each quarter of the fiscal year will contain 13 weeks except for the infrequent fiscal years with 53 weeks.

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2. Stock-Based Compensation

     On June 30, 2004, Holding adopted a stock option plan, pursuant to which the Board of Directors of Holding may grant options to purchase an aggregate of 163,778 shares of common stock of Holding. Such options may be granted to directors, employees and consultants of Holding and its subsidiaries, including the Company. At December 4, 2004, options to purchase a total of 127,397 shares of common stock of Holding had been issued to members of management of the Company (the “Options”) and 36,381 were reserved for future issuance. All outstanding options were granted at $10 per share and expire ten years from the date of grant. A portion of each outstanding option vests daily on a pro-rata basis over a five-year period from the date of grant and the remaining portion of each outstanding option vests seven years from the date of grant, subject to accelerated vesting based on the achievement of certain performance measures.

     The following table summarizes changes in shares for predecessor fiscal 2005 and successor fiscal 2005:

     The Company treats the Options as stock-based employee compensation for employees of the Company. As permitted under United States Generally Accepted Accounting Principles (“GAAP”), the Company accounts for the Options under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), and related Interpretations using the intrinsic value method. Accordingly, no compensation expense has been recognized for the Options in its consolidated statements of operations. Had compensation expense for the Options been determined in accordance with the minimum value approach as defined by Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure — an amendment of SFAS 123” (“SFAS 148”), the Company’s net income (loss) and earnings (loss) per share would have been the following:

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          The Company engaged an independent third party to perform a valuation analysis of the employee stock options. The estimated total stock-based employee compensation expense was determined using the Black-Scholes-Merton option pricing model with the following weighted average assumptions:

          In December of 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (Revision 2004), “Share-Based Payment” (“SFAS 123R”) which is effective for reporting periods for non-public companies (as defined in SFAS 123R) beginning after December 15, 2005. The new statement requires compensation expense associated with share-based payments to employees to be recognized in the financial statements based on their fair values. The Company currently accounts for the Options under the recognition and measurement principles of APB 25 and related Interpretations using the intrinsic value method. Accordingly, no compensation expense has been recognized for the Options in its consolidated statements of operations. Upon the adoption of SFAS 123R, the Company will be required to apply the provisions of the statement prospectively for any newly issued, modified or settled award after the date of initial adoption. As the Company currently uses the intrinsic value method to value the Options, the fair value assigned to any newly issued, modified or settled awards after the adoption of SFAS 123R is expected to be significantly greater due to the differences in valuation methods.

     3. Acquisition

          On June 30, 2004, the shareholders of PF Management, the sole shareholder of the Company, sold their shares of stock in PF Management to Holding. In connection with the sale, the following occurred:

	•	The Company merged with Pierre Merger Corp., an affiliate of MDP, with the Company being the surviving corporation following the merger.
	•	The Company terminated its three-year variable-rate $40 million revolving credit facility and obtained a $190 million credit facility from a new lender which includes a six-year variable-rate $150 million term loan and a five-year variable rate $40 million revolving credit facility with a $10 million letter of credit subfacility. See Note 5, “Long-Term Debt.”
	•	The Company terminated its few remaining related party transactions (described in Note 10, “Related Party Transactions”), transferred miscellaneous assets to Messrs. Richardson and Clark, our former Chairman and Vice Chairman, respectively, including the Company’s airplane, which was distributed to Mr. Richardson.
	•	Pierre Merger Corp. closed a cash tender offer and consent solicitation for the Company’s Old Notes (as defined in Note 5, “Long-Term Debt”). Holders of approximately $106.3 million, or approximately 92%, of aggregate principal amount of the Company’s outstanding Old Notes tendered their Old Notes. The Company, as the surviving corporation of the merger with Pierre Merger Corp., accepted and paid for all Old Notes tendered pursuant to the tender offer.

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		A redemption notice for the Old Notes not tendered (approximately $8.7 million) was issued on June 30, 2004 and these Old Notes were redeemed on July 20, 2004.
	•	The Company issued $125.0 million of 9-7/8% Senior Subordinated Notes due 2012 (the “New Notes”). The proceeds of the New Notes, together with the equity contributions from MDP and certain members of management (as described below) and borrowings under our new senior credit facility, were used to finance the Acquisition of the Company and to repay outstanding indebtedness.
	•	The Company’s President and Chief Executive Officer, Norbert E. Woodhams, and its Senior Vice President of Sales, Marketing and New Product Development, Robert C. Naylor, signed employment agreements committing them to continue working for the Company after the sale. The stated term of employment for each executive is one year, but each agreement will renew automatically and continuously year-to-year unless terminated.
	•	The management investors, the Company’s President and Chief Executive Officer, Norbert E. Woodhams, and its Senior Vice President of Sales, Marketing and New Product Development, Robert C. Naylor, invested approximately $4.9 million in a deferred compensation plan. This deferred compensation plan is funded through a rabbi trust that owns preferred stock of Holding with an aggregate liquidation value of approximately $4.9 million.
	•	In addition to the base purchase price, the stock purchase agreement entitles the selling shareholders to earn-out cash payments, which includes an additional aggregate amount of $13.0 million in the event that, at the end of any fiscal quarter during the fiscal year ending March 5, 2005, the Company achieves EBITDA (as defined in the stock purchase agreement) for the prior four fiscal quarters then ended of $56.0 million or more. No portion of the additional amount will be payable if this EBITDA target is not met.

          The following table presents unaudited pro forma information for predecessor third quarter 2004, as if the Acquisition had occurred on March 2, 2003.

     The following table presents unaudited pro forma information for predecessor fiscal 2004, and for predecessor fiscal 2005 and successor fiscal 2005 combined, as if the Acquisition had occurred on March 2, 2003 and March 7, 2004, as applicable.

     These unaudited pro forma results, based on assumptions deemed appropriate by the Company’s management, have been prepared for informational purposes only and are not necessarily indicative of the amounts that would have resulted if the Company had been acquired by MDP on March 2, 2003 or March 7, 2004, as applicable. Purchase related adjustments to the results of operations include the effects on depreciation and amortization, interest expense, cost of goods sold and income taxes.

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     Included in these pro forma results are certain predecessor fees that the Company does not expect to incur in the future. These include professional fees, primarily related to the restructuring of the Fourth Supplemental Indenture on March 8, 2004 and the Management Buy Out on July 26, 2002. For predecessor third quarter 2004, these fees amounted to $357,630. No such fees existed for the successor third quarter 2005. For predecessor fiscal 2004 and for combined predecessor fiscal 2005 and successor fiscal 2005, these fees amounted to $1,540,650 and $2,591,989, respectively.

     Other predecessor expenses included in these pro forma results that are no longer expected to be incurred include outside Board of Director fees, community relations and donations to our former shareholder’s alma mater. For predecessor third quarter 2004, these fees amounted to $278,255. No such fees existed for successor third quarter 2005. For predecessor fiscal 2004 and for combined predecessor fiscal 2005 and successor fiscal 2005, these fees amounted to $512,394 and $600,653, respectively.

     Also included in the pro forma results for predecessor fiscal 2005 and successor fiscal 2005 combined are certain Acquisition expenses related to the sale of the Company to MDP. These transaction expenses include professional fees of $956,000 for predecessor fiscal 2005 and successor fiscal 2005 combined. Other predecessor fiscal 2005 and successor fiscal 2005 combined transaction expenses relating to the previous shareholders’ adviser amounted to $780,952. A termination payoff of the endorsement between the Company and Crawford Race Cars, LLC also resulted in expense in predecessor fiscal 2005 and successor fiscal 2005 combined amounting to $318,000 that is not expected to be incurred in the future.

     The unaudited pro forma condensed consolidated financial statements reflect the Acquisition of the Company in accordance with Financial Accounting Standard No. 141 (“FAS 141”) —Business Combinations and Financial Accounting Standard No. 142 (“FAS 142”) —Goodwill and Other Intangible Assets.

     The Acquisition was recorded under the purchase method of accounting. The purchase price has been allocated to assets acquired and liabilities assumed based on the estimated fair market value at the date of Acquisition. The allocation of the purchase price is as follows:

     The initial allocation of the purchase price to specific assets and liabilities was based, in part, upon preliminary appraisals, and was therefore subject to change. Net assets acquired totaling $255,096,826 were previously reported in the Company’s 10-Q for the period ended September 4, 2004. The increase in net assets acquired is due to the final working capital adjustment and other miscellaneous adjustments. The Company has obtained outside appraisals of acquired assets and liabilities in fiscal 2005. Deferred tax liabilities have been finalized based on the final allocation of the purchase price and the determination of the tax basis of the assets and liabilities acquired.

4. Inventories

     A summary of inventories, by major classifications, follows:

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5. Long - Term Debt

     Long-term debt is comprised of the following:

     As of December 4, 2004, the Company had no outstanding borrowings under its new revolving credit facility and borrowing availability of approximately $35.4 million.

     On March 8, 2004, following a consent solicitation in which consents of holders of $112.4 million in aggregate principal amount of the Company’s outstanding senior notes due 2006 (the “Old Notes”), representing 97.74% of the outstanding Old Notes, consented to a Fourth Supplemental Indenture between the Company and U.S. Bank National Association, as trustee (the “Trustee”), the Company entered into the Fourth Supplemental Indenture with the Trustee. Among other things, the Fourth Supplemental Indenture increased the annual interest rate on the Old Notes from 10.75% to 12.25% through March 31, 2005 and 13.25% thereafter and required the payment of a cash consent fee of $3.5 million (3% of the principal amount of Old Notes held by each consenting noteholder); required the termination of all related party transactions, except for certain specifically-permitted transactions (see Note 10, “Related Party Transactions”); provided for the assumption by the Company of approximately $15.3 million of subordinated debt of PF Management, Inc., the sole shareholder of the Company; and waived any and all defaults of the Indenture existing as of March 8, 2004.

     Concurrently with the execution of the Fourth Supplemental Indenture, the Company took title to an aircraft transferred from a related party subject to $5.6 million of existing purchase money debt; assumed $15.3 million of debt from PF Management; cancelled the $1.0 million related party note receivable against the debt assumed from PF Management; cancelled the balances owed by the Company to certain related parties, as follows: $0.5 million owed to Columbia Hill Aviation; $3.5 million owed to PF Purchasing; $0.5 million owed to PF Distribution; and assumed the operating leases of PF Distribution in connection with the Fourth Supplemental Indenture. Minimum lease payments on the former PF Distribution operating leases were scheduled to be $3.0 million during fiscal year 2005, $2.9 million during fiscal year 2006 and $0.5 million during fiscal year 2007. We refer to these transactions as the “Restructuring”.

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     On June 30, 2004, the shareholders of PF Management closed the sale of their shares of stock of PF Management to Holding (see Note 3, “Acquisition”). Effective June 30, 2004, the Company terminated its three-year variable-rate $40 million revolving credit facility. Existing debt issuance costs related to the Company’s former $40 million facility in the amount of $0.5 million and a prepayment penalty paid to the former lender in the amount of $0.4 million were charged to interest expense. Also effective June 30, 2004, the Company obtained a $190 million credit facility from a new lender which includes a six-year variable-rate $150 million term loan, a five-year variable rate $40 million revolving credit facility and a $10 million letter of credit subfacility. Funds available under this new facility are available for working capital requirements, permitted investments and general corporate purposes. Borrowings under the new facility bear interest at floating rates based upon the interest rate option selected from time to time by the Company and are secured by a first-priority security interest in substantially all of the Company’s assets. The interest rate for borrowings under the new revolving credit facility at December 4, 2004 was 6.5% (prime plus 1.5%). Repayment of borrowings under the term loan is $375,000 per quarter beginning on September 4, 2004, with a balloon payment of $141.4 million due on June 5, 2010. In addition to the scheduled quarterly payment, prepayments on the term loan totaling $7.8 million were made during successor third quarter 2005. The maturity date of the $40 million revolving credit facility is June 30, 2009. In addition, the Company is required to satisfy certain financial covenants regarding cash flow and capital expenditures.

     Also in conjunction with the sale, the Company issued $125.0 million of 9⅞% Senior Subordinated Notes due 2012 (the “New Notes”). The proceeds of the New Notes, together with the equity contributions from MDP and certain members of management (see Note 3, “Acquisition”) and borrowings under our new senior credit facility, were used to finance the Acquisition of the Company and to repay outstanding indebtedness, including paying off debt of PF Management assumed by the Company under the Fourth Supplemental Indenture (except capital leases), paying for the Old Notes tendered in connection with the tender offer described in Note 3, “Acquisition” and redeeming the Old Notes not tendered.

6. Goodwill and Other Intangible Assets

     In conjunction with the Acquisition, the Company engaged an independent party to perform valuations for financial reporting purposes on the Company’s goodwill and other intangible assets. Assets identified through this valuation process included goodwill, formulas, customer relationships, licensing agreements and certain trade names and trademarks.

     Prospectively, in accordance with Financial Accounting Standard No. 142—Goodwill and Other Intangible Assets (“SFAS 142”), the Company will test recorded goodwill and other intangible assets with indefinite lives for impairment at least annually. All other intangible assets with finite lives will be amortized over their estimated economic or estimated useful lives. In addition, all other intangible assets will be reviewed for impairment in accordance with SFAS 144.

     The Company’s amortizable other intangible assets are amortized using accelerated amortization methods that match the expected benefit derived from the assets. The accelerated amortization methods allocate amortization expense in proportion to each year’s expected revenues to the total expected revenues over the estimated useful lives of the assets.

     The gross carrying value of goodwill and the gross carrying value and accumulated amortization of other intangible assets are as follows:

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     Activity related to goodwill during predecessor fiscal 2005 and successor fiscal 2005 combined was as follows:

Goodwill:

     The initial allocation of the purchase price to specific assets and liabilities was based, in part, upon preliminary appraisals, and was therefore subject to change. During the quarter ended December 4, 2004, a final working capital adjustment and other miscellaneous adjustments related to the Acquisition resulted in an increase in goodwill of $5,820,736.

     The future amortization of other intangible assets (dollars in thousands) for the next five fiscal years is estimated to be as follows:

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7 . Comprehensive Income

     Total comprehensive income (loss) is comprised solely of net income (loss) in successor third quarter 2005, predecessor fiscal 2005, successor fiscal 2005, predecessor third quarter 2004 and predecessor fiscal 2004.

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8. Supplemental Cash Flow Disclosures  -  Cash Paid During the Period and Non-Cash Transactions

9. Recently Issued Accounting Guidance

     In December of 2003, the Financial Accounting Standards Board (“FASB”) issued FIN 46R, “Consolidation of Variable Interest Entities” (“FIN 46R”), which replaces the same titled FIN 46 that was issued in January 2003. FIN 46R addresses how to identify variable interest entities and the criteria that requires a company to consolidate such entities in its financial statements. FIN 46R is effective for the first reporting period that ends after March 15, 2004. This statement did not have an impact on the Company’s financial statements.

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     In December of 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (Revision 2004), “Share-Based Payment” (“SFAS 123R”), which is effective for reporting periods for non-public companies (as defined in SFAS 123R) beginning after December 15, 2005. The new statement requires compensation expense associated with share-based payments to employees to be recognized in the financial statements based on their fair values. The Company currently accounts for the Options to purchase shares of common stock of Holding issued to employees of the Company under the recognition and measurement principles of APB 25, and related Interpretations using the intrinsic value method. Accordingly, no compensation expense has been recognized for the Options in its consolidated statements of operations. Upon the adoption of SFAS 123R, the Company will be required to apply the provisions of the statement prospectively for any newly issued, modified or settled award after the date of initial adoption. As the Company currently uses the intrinsic value method to value the Options, the fair value assigned to any newly issued, modified or settled awards after the adoption of SFAS 123R is expected to be significantly greater due to the differences in valuation methods.

10. Related Party Transactions

     As described in Note 5, “Long-Term Debt”, on March 8, 2004, following a consent solicitation in which a majority of the holders of the Company’s outstanding Old Notes consented to a Fourth Supplemental Indenture between the Company and the Trustee, the Company entered into the Fourth Supplemental Indenture with the Trustee. Among other things, the Fourth Supplemental Indenture limited future related party transactions and required the termination of all related party transactions, except for certain specifically-permitted transactions.

     The following related party transactions were specifically permitted under the terms of the Fourth Supplemental Indenture:

	•	Columbia Hill Land Company, LLC, owned 50% by each of James C. Richardson and David R. Clark, our then Chairman and Vice-Chairman, respectively, leased office space to the Company in Hickory, North Carolina, pursuant to a ten-year lease that commenced in September 1998. Rents paid under the lease were approximately $29,000, $29,000 and $58,000 during successor fiscal 2005, predecessor fiscal 2005 and predecessor fiscal 2004, respectively.
	•	On March 8, 2004 the Company took title to an aircraft that was transferred from Columbia Hill Aviation, LLC (“CHA”), owned 100% by PF Management, subject to existing purchase money debt. The aircraft was originally leased by the Company from CHA beginning in the fourth quarter of fiscal 2002. Effective March 1, 2002, the original lease was cancelled and replaced with a non-exclusive lease agreement. Pursuant to this new lease, the Company was obligated to make 16 quarterly lease payments of $471,500 each for the right to use the aircraft for up to 115 flight hours per quarter, based on availability. Under this lease agreement, CHA was responsible for all expenses incurred in the operation of the use of the aircraft, except that the Company provided its own flight crew.

     All other related party transactions that were in effect at March 6, 2004 were terminated as of March 8, 2004 pursuant to the terms of the Fourth Supplemental Indenture. As a result of the termination of these related party transactions, subsequent to March 8, 2004, the Company has performed its purchasing and distribution services internally.

     The following transactions were entered into on March 8, 2004 as permitted by the Fourth Supplemental Indenture:

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     The $339,639 charge represents the removal of members’ equity of CHA.

     On June 30, 2004, in conjunction with the sale by the shareholders of PF Management of their shares of stock of PF Management to Holding, all related party transactions were terminated as described in Note 3, “Acquisition”.

11. Subsequent Events

     Effective December 27, 2004, the interest rate under the Company’s New Notes increased by 0.25% per annum as a result of the Company’s Registration Statement on Form S-4 relating to the exchange of the New Notes (the “S-4”) not being declared effective by the Securities and Exchange Commission (the “SEC”) on or before such date. The delay in effectiveness relates to the Company’s request for confidential treatment of portions of certain material contracts. The interest rate will continue to increase an additional 0.25% per annum at the end of each subsequent 90-day period during which the S-4 has not been declared effective by the SEC, up to a maximum increase of 1.0% per annum. The interest rate will decrease to its original rate upon the S-4 being declared effective.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Successor Third Quarter 2005 Compared to Predecessor Third Quarter 2004

     Revenues, net. Net revenues increased by $18.1 million in successor third quarter 2005 compared to predecessor third quarter 2004, or 19.3%. The increase in net revenues was the result of increases in sales across most of the Company’s end-market segments, including the substantial development of national business with existing customers. Included in predecessor third quarter 2004 are revenues of $48,867 related to Compass Outfitters, LLC., which was retained by the selling shareholders.

     Cost of goods sold. Cost of goods sold increased by $13.6 million in successor third quarter 2005 compared to predecessor third quarter 2004, or 20.5%. As a percentage of revenues, cost of goods sold increased from 70.9% to 71.6%. This increase was primarily due to increased raw material prices ($2.5 million), the continued growth of lower margin, high volume business with an existing customer and the impact of a $0.4 million purchase accounting adjustment on beginning inventory (as a result of the Acquisition). The increase was partially offset by price increases passed on to customers and the elimination of commissions as a result of the termination of the Company’s purchasing agreement with PF Purchasing. Commissions paid to PF Purchasing during predecessor third quarter 2004 were $1.5 million. This affiliate relationship was terminated in conjunction with the restructuring of the Company’s Old Notes, which was completed on March 8, 2004.

     Selling, general and administrative . Selling, general and administrative expenses decreased by $4.3 million in successor third quarter 2005 compared to predecessor third quarter 2004, or 21.9%. As a percentage of revenues, selling, general and administrative expenses decreased from 21.0% to 13.8%. This decrease was primarily due to the elimination of PF Distribution fees and a decrease in former affiliate expenses, partially offset by increased distribution costs. Expenses associated with the previous shareholders in predecessor third quarter 2004 that were not present in successor third quarter 2005 and are not expected to be incurred in the future include the following:

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     Distribution expenses (a) were incurred under related party agreements that were terminated in March 2004 as part of the Restructuring. The house lease (b) relates to rent expense, maintenance and other occupancy costs paid to related parties pursuant to a lease that was terminated in connection with the Restructuring. Compensation expense (c) relates to personnel who were terminated in connection with the sale of the Company and will not be replaced. Travel and entertainment (d) relates to expenses incurred by personnel who were terminated and will not be replaced as a result of the sale of the Company. Office Expense (e) relates to rent expense, maintenance and other occupancy costs associated with the lease of an office building from a related party that was terminated in connection with the sale of the Company. Aircraft expense (f) relates to the leasing of an aircraft owned by Columbia Hill Aviation, LLC which was formerly a subsidiary of PF Management, which was retained by the selling shareholders. Compass Outfitters (g) relates to expense incurred in connection with an asset that was retained by the selling shareholders. The professional fees (h) primarily related to the restructuring of the Fourth Supplemental Indenture on March 8, 2004 and to the sale of the Company. The previous shareholders’ other expenses (i) relate to outside board of director fees, community relations, and contributions made to the former owner’s alma mater.

     Operational selling, general, and administrative expenses were higher in successor third quarter 2005 by $1.0 million compared to predecessor third quarter 2004 due to higher costs for the storage of increased inventory, higher fuel surcharges impacted by the price of crude oil and an increase in promotional expenses. These increases were offset, in part, by lower corporate training expense and a decrease in warehouse club demos. Included in successor third quarter 2005 is a non-cash deferred compensation charge of $0.1 million related to management’s investment in the acquisition of the Company.

     Depreciation and Amortization. Depreciation and amortization expense increased in successor third quarter 2005 compared to predecessor third quarter 2004 by $7.0 million. This is due to the amortization of other intangible assets in successor third quarter 2005, amounting to $6.6 million.

     Other Expense. Other expense consists primarily of interest on fixed and variable rate long-term debt and interest on a revolving loan, both of which were entered into in connection with the Acquisition. Interest expense increased in successor third quarter 2005 compared with predecessor third quarter 2004 by $1.5 million, or 41.4%. This is due to the additional debt incurred as a result of the Acquisition.

     Income taxes. The effective tax rate for the successor third quarter 2005 was 32.8% compared to 35.1% for predecessor third quarter 2004. The decrease in the effective tax rate is primarily due to a decrease in non-deductible expenses in the current period over the same period in the prior year.

Predecessor Fiscal 2005 and Successor Fiscal 2005 Combined Compared to Predecessor Fiscal 2004

     Revenues net. Net revenues increased by $46.4 million, or 18.1%. The increase in net revenues was the result of increases in sales across most of the Company’s end-market segments, including the substantial development of national business with an existing customer and the advent of business with a new customer. Included in predecessor fiscal 2004 are revenues of $94,821 related to Compass Outfitters, LLC. Included in predecessor fiscal 2005 and successor fiscal 2005 combined are non-recurring revenues of $8,604 related to Compass Outfitters, LLC. These revenues will not be present in future periods due to Compass Outfitters, LLC being retained by the selling shareholders.

     Cost of goods sold. Cost of goods sold increased by $45.7 million in predecessor fiscal 2005 and successor fiscal 2005 combined compared to predecessor fiscal 2004, or 25.2%. As a percentage of revenues, cost of goods sold increased from 70.5% to 74.8%. This increase was primarily due to increased raw material prices ($8.5 million), the impact of a $1.9 million purchase accounting adjustment on beginning inventory (as a result of the Acquisition) and start-up costs of $3.1 million related to the development of new lower margin, high volume national accounts business. In predecessor fiscal 2005 and successor fiscal 2005 combined, beef, pork, chicken and cheese prices increased approximately 1.5%, 46.1%, 39.0% and 26.5%, respectively, compared to predecessor fiscal 2004. These increases were partially offset by price increases passed on to customers and the elimination of commissions as a result of the termination of the Company’s purchasing agreement with PF Purchasing. Commissions paid to PF Purchasing totaled $3.8 million during predecessor fiscal 2004. This affiliate relationship was terminated in conjunction with the restructuring of the Company’s Old Notes, which was completed on March 8, 2004.

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     Selling, general and administrative. Selling, general and administrative expenses decreased by $7.4 million, or 12.6%. As a percentage of revenues, selling, general and administrative expenses decreased from 22.9% to 17.0%. This decrease was primarily due to the elimination of PF Distribution fees of $8.4 million and a decrease in former affiliate expenses offset, in part, by expenses associated with the sale of the Company that are not expected to repeat in future periods. Expenses associated with the previous shareholders in predecessor fiscal 2005 and successor fiscal 2005 combined and predecessor fiscal 2004 that are not expected to be incurred in the future include the following:

     Distribution expenses (a) incurred under related party agreements that were terminated in March 2004 as part of the Restructuring. The house lease (b) relates to rent expense, maintenance and other occupancy costs paid to related parties pursuant to a lease that was terminated in connection with the Restructuring. Compensation expense (c) relates to personnel who were terminated in connection with the sale of the Company and will not be replaced. Travel and entertainment (d) relates to expenses incurred by personnel who were terminated and will not be replaced as a result of the sale of the Company. Office expense (e) relates to rent expense, maintenance and other occupancy costs associated with the lease of an office building from a related party that was terminated in connection with the sale of the Company. Aircraft expense (f) relates to the leasing of an aircraft owned by Columbia Hill Aviation, LLC which was formerly a subsidiary of PF Management, which was retained by the selling shareholders. Compass Outfitters (g) relates to expenses incurred in connection with an asset that was retained by the selling shareholders. The professional fees (h) primarily are related to the restructuring of the Fourth Supplemental Indenture on March 8, 2004 and to the sale of the company. The previous shareholders’ other expenses (i) relate to outside board of director fees, community relations, and contributions made to the former owners alma mater. The previous shareholders’ transaction fees (j) include legal, accounting, and tax consulting fees related to the sale of the company. The consulting services (k) consist of the fee paid to the selling shareholders’ adviser for his role in the transaction. The endorsement termination (l) relates to the contract between the Company and Crawford Race Cars, LLC. Other (m) includes employee travel and other expenses incurred as a result of the debt placement for the Acquisition.

     Operational selling, general, and administrative expenses remained constant for the two year-to-date periods. Included in successor fiscal 2005 is a non-cash deferred compensation charge of $0.2 million related to management’s investment in the acquisition of the Company.

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     Depreciation and Amortization. Depreciation and amortization expense increased by $11.7 million. The increase is due primarily to amortization of intangible assets in successor fiscal 2005 as a result of the Acquisition.

     Loss on Disposal of Assets. Loss on disposal of assets increased by $0.3 million. The increase is due to the recording of losses related to affiliate companies as a consequence of the Restructuring.

     Other Expense. Other expense consists primarily of interest on fixed and variable rate long-term debt and interest on a revolving loan, both of which exist as a result of the Acquisition. Other expense increased by $7.8 million, or 59.6%. This increase was primarily due to expenses as a result of the Acquisition, including $4.3 million for the write-off of deferred loan origination fees, $0.6 million for the repayment of the Old Notes and $0.5 million for the repayment of our former revolving credit facility combined with the increased debt and borrowings under our new revolving credit facility. See “Liquidity and Capital Resources” below.

     Income taxes. The effective tax rate for both predecessor fiscal 2005 and successor fiscal 2005 was 32.8%, compared to 33.2% for predecessor fiscal 2004. The decrease in the effective tax rate is primarily due to a decrease in non-deductible expenses in the current period over the same period in the prior year.

Critical Accounting Policies and Estimates

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the appropriate application of certain accounting policies, many of which require the Company to make estimates and assumptions about future events and their impact on amounts reported in the financial statements and related notes. Since future events and the impact of those events cannot be determined with certainty, the actual results will inevitably differ from the Company’s estimates. Such differences could be material to the financial statements.

     The Company believes its application of accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are constantly reevaluated, and adjustments are made when facts and circumstances dictate a change. Historically, the Company’s application of accounting policies has been appropriate, and actual results have not differed materially from those determined using necessary estimates.

     The following critical accounting policies affect the Company’s more significant judgments and estimates used in the preparation of its financial statements.

     Revenue Recognition. Revenue from sales of food processing products is recorded at the time title transfers. Standard shipping terms are FOB destination, therefore title passes at the time the product is delivered to the customer. Revenue is recognized as the net amount to be received after deductions for estimated discounts, product returns and other allowances. These estimates are based on historical trends and expected future payments (see also Promotions below).

     Goodwill and Other Intangible Assets. In conjunction with the Acquisition, the Company engaged an independent party to perform valuations for financial reporting purposes of the Company’s goodwill and other intangibles. Assets identified through this valuation process included goodwill, formulas, customer relationships, licensing agreements and certain trade names and trademarks.

     Prospectively, in accordance with Financial Accounting Standard No. (“SFAS”) 142—Goodwill and Other Intangible Assets, the Company will test recorded goodwill and intangibles with indefinite lives for impairment at least annually. All other intangible assets with finite lives will be amortized over their estimated economic or estimated useful lives. In addition, all other intangible assets will be reviewed for impairment in accordance with SFAS 144.

     The Company’s amortizable intangible assets are amortized using accelerated amortization methods that match the expected benefit derived from the assets. The accelerated amortization methods allocate amortization expense in proportion to each year’s expected revenues to the total expected revenues over the estimated useful lives of the assets.

     Promotions. Promotional expenses associated with rebates, marketing promotions and special pricing arrangements are recorded as a reduction of revenues or selling expense at the time the sale is recorded. Certain of these

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expenses are estimated based on historical trends and expected future payments to be made under these programs. The Company believes the estimates recorded in the financial statements are reasonable estimates of the Company’s liability under these programs.

     Concentration of Credit Risk and Significant Customers. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade receivables. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. The Company encounters a certain amount of credit risk as a result of a concentration of receivables among a few significant customers. Sales to the Company’s largest customer were approximately 22.1%, 28.8% and 23.9% of revenues for successor third quarter 2005, predecessor fiscal 2005 and successor fiscal 2005, respectively. Accounts receivable at December 4, 2004 included receivables from the Company’s largest customer totaling $3.4 million.

     Stock-Based Compensation. The Company treats the Options as stock-based employee compensation for employees of the Company. As permitted under United States Generally Accepted Accounting Principles (“GAAP”), the Company accounts for the Options under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), and related Interpretations using the minimum value method. Accordingly, no compensation expense has been recognized for the Company’s stock option plan in its consolidated statements of operations.

     New Accounting Pronouncements. In December of 2003, the FASB issued FIN 46R, “Consolidation of Variable Interest Entities” (“FIN 46R”), which replaces the same titled FIN 46 that was issued in January 2003. FIN 46R addresses how to identify variable interest entities and the criteria that requires a company to consolidate such entities in its financial statements. FIN 46R is effective for the first reporting period that ends after March 15, 2004. This statement did not have an impact on the Company’s financial statements.

     In December of 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (Revision 2004), “Share-Based Payment” (“SFAS 123R”) which is effective for reporting periods for non-public companies (as defined in SFAS 123R) beginning after December 15, 2005. The new statement requires compensation expense associated with share-based payments to employees to be recognized in the financial statements based on their fair values. The Company currently accounts for the options to purchase shares of common stock of Holding issued to employees of the Company (“Options”) under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), and related Interpretations using the intrinsic value method. Accordingly, no compensation expense has been recognized for the Options in its consolidated statements of operations. Upon the adoption of SFAS 123R, the Company will be required to apply the provisions of the statement prospectively for any newly issued, modified or settled award after the date of initial adoption. As the Company currently uses the intrinsic value method to value the Options, the fair value assigned to any newly issued, modified or settled awards after the adoption of SFAS 123R is expected to be significantly greater due to the differences in valuation methods.

Liquidity and Capital Resources

     Net cash provided by operating activities for predecessor fiscal 2005 and successor fiscal 2005 was $0.4 million and $8.8 million, respectively, compared to $6.1 million for predecessor fiscal 2004. The primary components of the net cash provided by operating activities for

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predecessor fiscal 2005 were: (1) a decrease in accounts receivable of $5.7 million; (2) an increase in trade accounts payable and other accrued liabilities of $2.2 million; offset by (3) an increase in inventory of $4.9 million and (4) an increase in refundable income taxes, prepaid expenses and other current assets of $0.5 million. The primary components of the net cash provided by operating activities for successor fiscal 2005 were: (1) a decrease in inventories of $2.9 million and (2) an increase in trade accounts payable and other accrued liabilities of $2.6 million offset by (3) an increase in accounts receivable of $9.4 million and (4) an increase in refundable income taxes, prepaid expenses and other current assets of $1.8 million.

     Net cash used in investing activities for predecessor fiscal 2005 and successor fiscal 2005 was $2.1 million and $1.7 million, respectively, compared to $8.5 million for predecessor fiscal 2004. The decrease is primarily due to significant capital expenditures for a plant expansion in predecessor fiscal 2004 that did not occur in predecessor fiscal 2005 or successor fiscal 2005.

     Net cash provided by (used in) financing activities for predecessor fiscal 2005 and successor fiscal 2005 was $3.7 million and ($7.1) million, respectively, compared to $3.6 million for predecessor fiscal 2004. Net cash provided by financing activities for predecessor fiscal 2005 was due primarily to: (1) net borrowings under the revolving credit agreement with former lender of $7.7 million; offset by (2) loan origination fees incurred in the amount of $3.4 million and (3) principal payments on long-term debt. Net cash used in financing activities for successor fiscal 2005 was due primarily to: (1) payoff of Old Notes; (2) return of capital to parent of $100.6 million; (3) repayment of debt in conjunction with the Acquisition of $29.0 million; (4) repayment of the revolving credit agreement of $18.5 million; (5) principal payments on long-term debt of $11.1 million and (6) loan origination fees of $9.2 million; offset by (7) borrowings under the new term loan of $150.0 million; (8) issuance of New Notes of $125.0 million and (9) the termination of a certificate of deposit for $1.3 million.

     The interest rate for borrowings under the Company’s new $40 million revolving credit facility and the Company’s $150 million term loan at December 4, 2004 was 6.5% (prime plus 1.5%).

     As of December 4, 2004, the Company had cash and cash equivalents on hand of $2.1 million, no outstanding borrowings under its revolving credit facility and borrowing availability of approximately $35.4 million. Also as of December 4, 2004, the Company had borrowings under its term loan of $141.5 million.

     The Company has budgeted approximately $1.0 million for capital expenditures for the remainder of fiscal 2005. These expenditures are primarily for the routine food processing capital improvement projects and other miscellaneous expenditures. The Company believes that funds from operations and funds from the new $40 million revolving credit facility, as well as the Company’s ability to enter into capital or operating leases, will be adequate to finance these capital expenditures.

     If the Company continues its historical revenue growth trend as expected, then the Company may be required to raise and invest additional capital for additional plant expansion projects to provide operating capacity to satisfy increased demand. Management believes that future cash requirements for these plant expansion projects may need to be met through other long-term financing sources. The incurrence of additional long-term debt is governed and restricted by the Company’s existing debt instruments. Furthermore, there can be no assurance that additional long-term financing will be available on advantageous terms (or any terms) when needed by the Company.

     On March 8, 2004, following a consent solicitation in which consents of holders of $112.4 million in aggregate principal amount of the Company’s outstanding senior notes due 2006 (the “Old Notes”), representing 97.74% of the outstanding Old Notes, consented to a Fourth Supplemental Indenture between the Company and U.S. Bank National Association, as trustee (the “Trustee”), the Company entered into the Fourth Supplemental Indenture with the Trustee. (see Note 3). Concurrently with the execution of the Fourth Supplemental Indenture the Company took title to an aircraft transferred from a related party subject to $5.6 million of existing purchase money debt; cancelled the $1.0 million related party note receivable from its principal shareholders; cancelled the balances owed by the Company to certain related parties, as follows: $0.5 million owed to Columbia Hill Aviation; $3.5 million owed to PF Purchasing and $0.5 million owed to PF Distribution; and assumed the operating leases of PF Distribution in connection with the Fourth Supplemental Indenture. Minimum lease payments on the former PF Distribution operating leases were scheduled to be $3.0 million during fiscal year 2005, $2.9 million during fiscal year 2006 and $0.5 million during fiscal year 2007. The Company assumed $15.3 million of subordinated debt of PF Management, Inc., the sole shareholder of the Company, in connection with the execution of the Fourth Supplemental Indenture and cancelled the $1.0 million related party note receivable against the debt assumed from PF Management.

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     On June 30, 2004, the shareholders of PF Management closed the sale of their shares of stock of PF Management to Holding (see Note 3). Effective June 30, 2004, the Company terminated its three-year variable-rate $40 million revolving credit facility. Existing debt issuance costs related to the Company’s former $40 million facility in the amount of $0.5 million and a prepayment penalty paid to the former lender in the amount of $0.4 million were charged to interest expense. Also effective June 30, 2004, the Company obtained a $190 million credit facility from a new lender which includes a six-year variable-rate $150 million term loan, a five-year variable rate $40 million revolving credit facility and a $10 million letter of credit subfacility. Funds available under this new facility are available for working capital requirements, permitted investments and general corporate purposes. Borrowings under the new facility bear interest at floating rates based upon the interest rate option selected from time to time by the Company and are secured by a first-priority security interest in substantially all of the Company’s assets. The interest rate for borrowings under the new revolving credit facility at December 4, 2004 was 6.5% (prime plus 1.5%). Repayment of borrowings under the term loan is $375,000 per quarter beginning on September 4, 2004, with a balloon payment of $141.4 million due on June 5, 2010. Prepayments on the term loan totaling $7.8 million were made during successor third quarter 2005, in addition to the scheduled quarterly payment. The maturity date of the $40 million revolving credit facility is June 30, 2009. In addition, the Company is required to satisfy certain financial covenants regarding cash flow and capital expenditures.

     Also in conjunction with the sale, the Company issued $125.0 million of 9?% Senior Subordinated Notes due 2012 (the “New Notes”). The proceeds of the New Notes, together with the equity contributions from MDP and certain members of management (see Note 3) and borrowings under our new senior credit facility, were used to finance the Acquisition of the Company and to repay outstanding indebtedness, including paying off debt of PF Management assumed by the Company under the Fourth Supplemental Indenture (except capital leases), paying for the Old Notes tendered in connection with the tender offer described in Note 3 and redeeming the Old Notes not tendered.

     Effective December 27, 2004, the interest rate under the Company’s New Notes increased by 0.25% per annum as a result of the Company’s Registration Statement on Form S-4 relating to the exchange of the New Notes (the “S-4”) not being declared effective by the Securities and Exchange Commission (the “SEC”) on or before such date. The delay in effectiveness relates to the Company’s request for confidential treatment of portions of certain material contracts. The interest rate will continue to increase an additional 0.25% per annum at the end of each subsequent 90-day period during which the S-4 has not been declared effective by the SEC, up to a maximum increase of 1.0% per annum. The interest rate will decrease to its original rate upon the S-4 being declared effective.

Seasonality

     Except for sales to school districts, which represent approximately 19% of the Company’s total sales and which decline significantly during summer, late November and December, there is no other significant seasonal variation in the Company’s sales.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     As discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended March 6, 2004, the Company is exposed to market risks stemming from changes in interest rates, foreign exchange rates and commodity prices. Changes in these factors could cause fluctuations in the Company’s financial condition, results of operations and cash flows. The Company owned no derivative financial instruments or nonderivative financial instruments held for trading purposes at December 4, 2004 or March 6, 2004. Certain of the Company’s outstanding nonderivative financial instruments at December 4, 2004 are subject to interest rate risk, but not subject to foreign currency or commodity price risk. In predecessor fiscal 2005 and successor fiscal 2005 combined, beef, pork, chicken and cheese prices increased approximately 12%, 51%, 22% and 18%, respectively, compared to the prices at the fiscal year ended March 6, 2004. The Company manages commodity price risk through purchase orders, non-cancelable contracts and by passing on such cost increases to customers.

     The Company’s major market risk exposure is potential loss arising from changing interest rates and its impact on long-term debt. The Company’s policy is to manage interest rate risk by maintaining a combination of fixed and variable rate financial instruments in amounts and with maturities that management considers appropriate. The risks associated with long-term debt at December 4, 2004 have not changed materially since March 6, 2004. Of the long-term debt outstanding at December 4, 2004, the $125.0 million of New Notes accrue interest at a fixed interest rate, while the $141.5 million outstanding borrowings under the Term B Loan facility and the revolving credit facility accrue interest at a variable interest rate. At December 4, 2004, there was no outstanding balance under the revolving credit facility. A rise in prevailing interest rates could have adverse effects on the Company’s financial condition and results of operations. A 25 basis point increase in the reference rates for the Company’s average variable rate debt outstanding during fiscal 2005 would have decreased net income for that period by approximately $180,884.

Cautionary Statement As To Forward Looking Information

     Certain statements made in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from expected results. These risks and uncertainties include: adverse changes in food costs and availability of supplies; our significant level of indebtedness; restrictions imposed by the Company’s debt instruments; competition in the food industry; competitive considerations; government regulation; dependence on significant customers; consolidation of our customers; general risks of the food industry, including risk of contamination, mislabeling of food products, a decline in meat consumption and outbreak of disease among cattle, chicken or pigs; dependence on key personnel; potential labor disruptions and other factors, risks and uncertainties identified in Exhibit 99.1 to our Annual Report on Form 10-K filed with the SEC on March 9, 2004 and in our other filings with the SEC. This list of risks and uncertainties is not exhaustive. Also, new risk factors emerge over time. Investors should not place undue reliance on the predictive value of forward-looking statements.

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ITEM 4. CONTROLS AND PROCEDURES

     As of the end of the period covered by this report, we performed an evaluation, under the supervision and with the participation of our management including the chief executive officer and the principal accounting officer, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our management, including the chief executive officer and principal accounting officer, concluded that our disclosure controls and procedures were effective. There have been no changes in internal control over financial reporting during our fiscal third quarter ended December 4, 2004, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION

     On June 30, 2004, Pierre Holding Corp., the indirect parent of the Company (“Holding”), adopted a stock option plan, pursuant to which the Board of Directors of Holding may grant options to purchase an aggregate of 163,778 shares of common stock of Holding. Such options may be granted to directors, employees and consultants of Holding and its subsidiaries, including the Company. At December 4, 2004, options to purchase a total of 127,397 shares of common stock of Holding had been issued to management of the Company and 36,381 were reserved for future issuance. See Note 2 “Stock-Based Compensation” to the consolidated financial statement for further discussion.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)       Exhibits

10.1    Pierre Holding Corp. 2004 Stock Option Plan dated June 30, 2004

10.2    Form of Option Agreement

31.1    Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer

31.2    Rule 13a-14(a)/15d-14(a) Certification of the Principal Financial Officer

32      Section 1350 Certifications of the Chief Executive Officer and the Principal Financial Officer

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SIGNATURES

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.

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