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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)

For the quarterly period ended May 29, 2004

or

For the transition period from              to              .

Commission file number 333-111407

NATIONAL BEEF PACKING COMPANY, LLC

(Exact name of registrant as specified in its charter)

12200 North Ambassador Drive

Kansas City, MO 64163

(Address of principal executive offices)

Telephone: (800) 449-2333

(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  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

There is no market for the Registrant’s equity. As of July 12, 2004, there were 121,849,626 Class A units and 18,810,045 Class B units outstanding.

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TABLE OF CONTENTS

Unless the context indicates or otherwise requires, the terms “National Beef,” “NBP,” “Company,” “we,” “our,” and “us” refer to National Beef Packing Company, LLC and its consolidated subsidiaries.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

NATIONAL BEEF PACKING COMPANY, LLC

AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

See accompanying notes to consolidated financial statements.

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NATIONAL BEEF PACKING COMPANY, LLC

AND SUBSIDIARIES

Consolidated Statement of Operations

(in thousands)

See accompanying notes to consolidated financial statements.

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NATIONAL BEEF PACKING COMPANY, LLC

AND SUBSIDIARIES

Consolidated Statement of Cash Flows

(in thousands)

See accompanying notes to consolidated financial statements.

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NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Interim Financial Statements

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information; therefore, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. For further information, refer to the Consolidated Financial Statements and Notes to Consolidated Financial Statements for the fiscal year ended August 30, 2003 (“Prospectus”) on file with the Securities and Exchange Commission (“SEC”) in the prospectus filed on April 2, 2004 pursuant to Rule 424(b)(3). The results of operations for the interim periods presented are not necessarily indicative of the results for a full fiscal year. Certain prior year amounts have been reclassified in order to conform to the current year presentation.

As described in Note 3 to the Consolidated Financial Statements for the fiscal year ended August 30, 2003 set forth in the Prospectus, effective August 7, 2003, U.S. Premium Beef, Ltd. acquired a controlling interest in Farmland National Beef Packing Company, L.P. (“FNBPC” or “Predecessor”) and formed National Beef Packing Company, LLC (“NBP” or “Successor”) in a transaction accounted for as a purchase (the “Transaction”). As a result of the Transaction, the consolidated financial information for the thirteen and thirty-nine weeks ended May 29, 2004 (Successor Period) is presented on a new basis of accounting and is, therefore, not comparable to the consolidated financial information for the fourteen and thirty-nine week periods ended May 31, 2003 (Predecessor Period).

NB Finance Corp., a wholly-owned finance subsidiary of NBP, is a co-issuer on a joint and several basis with NBP of the Senior Notes, which are our senior unsecured obligations, ranking equal in right of payment with all of our other senior unsecured obligations. NB Finance Corp. has nominal assets and conducts no business or operations. There are no significant restrictions on the ability of subsidiaries to transfer funds to NBP.

(2) Inventories

Inventories at May 29, 2004 and August 30, 2003 consisted of the following (in thousands):

(3) Acquisition of National Carriers, Inc.

On March 28, 2003, FNBPC acquired National Carriers, Inc. (“National Carriers”), a refrigerated and livestock contract carrier service with terminals in Liberal, Kansas; Dallas, Texas; and Denison, Iowa, for approximately $13.4 million, including the assumption of approximately $8.4 million of indebtedness. The purchase price has been allocated to the assets acquired and liabilities assumed and the operating results of National Carriers are reflected in NBP’s consolidated financial statements subsequent to the date of acquisition. The pro forma effect of this acquisition was not material to the consolidated financial statements of NBP for the thirty-nine weeks ended May 31, 2003.

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(4) Comprehensive Income

Comprehensive income, which consists of net income and foreign currency translation adjustments, was as follows for the periods indicated (in thousands):

(5) Contingencies

On July 1, 2002, a lawsuit was filed against the Predecessor, ConAgra Beef Company, Tyson Foods, Inc. and Excel Corporation in the United States District Court for the District of South Dakota seeking certification of a class of all persons who sold cattle to the defendants for cash, or on a basis affected by the cash price for cattle, during the period from April 2, 2001 through May 11, 2001 and for some period up to two weeks thereafter. The case was filed by three named plaintiffs on behalf of a putative nationwide class that plaintiffs estimate is comprised of hundreds or thousands of members. The complaint alleges that the defendants, in violation of the Packers and Stockyards Act of 1921, knowingly used, without correction or disclosure, incorrect and misleading boxed beef price information generated by the USDA to purchase cattle offered for sale by the plaintiffs at a price substantially lower than was justified by the actual and correct price of boxed beef during this period. The plaintiffs seek damages in excess of $50.0 million from all defendants as a group on behalf of the class. FNBPC answered the complaint and joined with the three other defendants in moving to dismiss this action. An amended complaint was filed and FNBPC joined in the other defendants’ motion to dismiss. The joint motion to dismiss was denied, and the judge ruled that the plaintiffs adequately alleged a violation of the Packers and Stockyards Act of 1921. The case was certified as a class-action matter in June, 2004. Accordingly, the lawsuit will proceed to trial. Management believes that FNBPC acted properly and lawfully in dealings with cattle producers. Management is currently unable to evaluate the outcome of this matter or to estimate the amount of potential loss, if any. In accordance with SFAS No. 5, Accounting for Contingencies, NBP has not established a loss accrual associated with this claim.

NBP is also a party to a number of other lawsuits and claims arising out of the operation of our business. Management believes the ultimate resolution of such matters should not have a material adverse effect on our financial condition, results of operations or liquidity.

(6) Capital Subject to Redemption

At any time after certain dates, the earliest being August 6, 2008, the latest being August 6, 2011, certain members of management and/or NBPCo Holdings have the right to request that NBP repurchase their interests, the value of which is to be determined pursuant to a mutually agreed appraisal process. If NBP is unable to effect the repurchase within a specified time, the requesting member(s) have the right to cause the Company to retain a financial advisor to sell the Company at such price and on such terms and conditions as may be approved by the requesting members. NBP accounts for changes in the redemption value of these interests by accreting the change over the period from the date of issuance to the earliest redemption date of the interest using the interest method. At May 29, 2004, the “Capital subject to redemption” was revalued by an independent appraisal process, and the value was determined to be $54.8

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million. Under the interest method, the carrying value of the “Capital subject to redemption” has been reduced by approximately $0.2 million to $59.5 million, as reflected in the accompanying Consolidated Balance Sheet as of May 29, 2004.

(7) Segments

The Company reports in two business segments: Core Beef and Other. The Company measures segment profit as operating income.

Core Beef—the majority of NBP’s revenues are generated from the sale of fresh meat, which include chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef, and other products. In addition, we also sell beef by-products to the variety meat, feed processing, fertilizer and pet food industries.

Other—the Other segment of NPB consists of the operations of National Carriers, Inc., a refrigerated and livestock contract carrier company and Kansas City Steak Company, LLC, a portion control steak cutting operation.

The following table represents segment results for the periods indicated (in thousands):

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(8) United States BSE Outbreak

On December 23, 2003, it was announced by the United States Department of Agriculture (USDA) that a single Holstein dairy cow was discovered in the state of Washington to have tested positive for Bovine Spongiform Encephalopathy, or BSE. The origin of the animal was subsequently traced to a farm in Canada. Shortly after the announcement, several countries representing a substantial share of NBP’s export business closed their borders to the importation of edible beef products from the United States. Responding to the loss of export markets, live cattle prices in the United States declined by approximately 18% within 3 days. In the fiscal year ended August 30, 2003, NBP’s total export sales were approximately 17.2% of total sales, including sales of non-food beef products such as hides.

During the second quarter we recorded charges to earnings totaling approximately $18.8 million due to the market impacts of the closure of international borders as a result of the BSE discovery in late December. These charges, recorded in sales and cost of sales in our Consolidated Statement of Operations, reflect: (1) volatility in the U.S. markets for finished goods and live cattle, with an impact noted in immediate margin erosion resulting from a rapid fall in cutout or sales values; (2) some product already destined for foreign markets re-routed for resale in the U.S., generally at prices lower than their original export value; and (3) lower value for certain inventory items which had been in the production pipeline and had not yet left the U.S. as they have no comparable domestic market. Certain by-products have been classified as Specified Risk Materials (“SRMs”), and have been banned from use in feedstocks and the human food chain. Some of these products previously enjoyed a market in foreign countries. The impacts of BSE were positively offset, in part, by strong domestic demand for beef products.

In addition, the USDA and the Food Safety Inspection Service (FSIS) published new regulations in response to the discovery of BSE in the state of Washington. These new regulations, among other things, govern the removal of SRMs during slaughter, cover the ban on the slaughtering of non-ambulatory animals for human food use, set forth the prohibition on the production of mechanically separated meat and ban certain techniques used in the slaughter process. The USDA also issued a notice announcing that FSIS inspectors will not mark ambulatory cattle that have been targeted for BSE surveillance testing as “inspected and passed” until negative test results are obtained. We do not anticipate that these new regulations, individually or in the aggregate, will have a material adverse effect on our business.

While exports of some beef products have commenced once again to Mexico, we cannot anticipate the duration of other continuing beef import bans or whether additional countries may impose similar restrictions. Thus far, the effect of resumed export of beef products to Mexico has been marginal on the United States beef industry. Fed cattle slaughter levels in the United States for the thirteen weeks ended May 29, 2004 fell approximately 5.6% below year-ago levels, reflecting constrained cattle supplies and reduced demand for export products.

The United States Department of Agriculture (USDA) has published a proposed rule revising its policy to keep the U.S. border closed to live animals for processing in the U.S. The comment period for this proposed rule closed on April 7, 2004 and publication of a final rule was anticipated within a reasonable time following closure of the comment period. In the interim, Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (“R-CALF” - a northern states cattle producer’s organization) was successful in obtaining an injunction against the USDA allowing importation of certain beef products produced in Canada pursuant to this rule, because USDA did not follow the “Administrative Procedures Act” prior to issuing its order allowing such action. The injunction has slowed progress toward publication of any final rule, which now is not expected until late July or August at the earliest.

A United States/Japanese Commission was formed to look at the optimal “science based” approach to resolving the issues between the U.S. and Japan. The commission is expected to hold its last meeting in mid-to-late July. Following this meeting, it is anticipated that trade representatives from the United States and Japan will continue their discussions on reopening of the Japanese market to imported beef products from the United States. However, we are not able to predict when or if those discussions will achieve that result.

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We cannot presently assess the full economic impact of the consequences of BSE on the U.S. beef industry or on our operations. Our revenues and net income may be materially adversely affected in the event existing import restrictions continue indefinitely, additional countries announce similar restrictions, additional regulatory restrictions are put into effect or domestic consumer demand for beef declines substantially.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Disclosure Regarding Forward-Looking Statements

This report contains “forward-looking statements,” which are subject to a number of risks and uncertainties, many of which are beyond our control. Forward-looking statements are typically identified by the words “believe,” “expect,” “anticipate,” “intend,” “estimate” and similar expressions. Actual results could differ materially from those contemplated by these forward-looking statements as a result of many factors, including economic conditions generally and in our principal markets, the availability and prices of live cattle and commodities, food safety, livestock disease, competitive practices and consolidation in the cattle production and processing industries, actions of domestic or foreign governments, hedging risk, changes in interest rates and foreign currency exchange rates, consumer demand and preferences, the cost of compliance with environmental and health laws, loss of key customers, loss of key employees, labor relations and consolidation among our customers. In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking information contained in this report will in fact transpire. Readers are cautioned not to place undue reliance on these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Please review the “Risk Factors” in our prospectus filed with the SEC on April 2, 2004 pursuant to Rule 424(b)(3) (“Prospectus”) for other important factors that could cause actual results to differ materially from those in any such forward-looking statements.

Outlook

Continued short supplies of live cattle available for slaughter as well as the lack of key export markets for sale of beef products have pressured industry margins for the latter part of our third quarter and the early part of our fourth quarter, compared to the same period in the prior year. These conditions lead us to believe that the results of the thirteen weeks ending August 28, 2004 may not compare favorably with the results of the thirteen weeks ended August 30, 2003.

Recent Developments

On December 23, 2003, it was announced by the United States Department of Agriculture (USDA) that a single Holstein dairy cow was discovered in the state of Washington to have tested positive for Bovine Spongiform Encephalopathy, or BSE. The origin of the animal was subsequently traced to a farm in Canada. Shortly after the announcement, several countries representing a substantial share of NBP’s export business closed their borders to the importation of edible beef products from the United States. Responding to the loss of export markets, live cattle prices in the United States declined by approximately 18% within 3 days. In the fiscal year ended August 30, 2003, NBP’s total export sales were approximately 17.2% of total sales, including sales of non-food beef products such as hides.

During the second quarter we recorded charges to earnings totaling approximately $18.8 million due to the market impacts of the closure of international borders as a result of the BSE discovery in late December. These charges, recorded in sales and cost of sales in our Consolidated Statement of Operations, reflect: (1) volatility in the U.S. markets for finished goods and live cattle, with an impact noted in immediate margin erosion resulting from a rapid fall in cutout or sales values; (2) some product already destined for foreign markets re-routed for resale in the U.S., generally at prices lower than their original export value; and (3) lower value for certain inventory items which had been in the production pipeline and had not yet left the U.S. as they have no comparable domestic market. Certain by-products have been classified as Specified Risk Materials (“SRMs”), and have been banned from use in feedstocks and the human food chain. Some of these products previously enjoyed a market in foreign countries. The impacts of BSE were positively offset, in part, by strong domestic demand for beef products.

In addition, the USDA and the Food Safety Inspection Service (FSIS) published new regulations in response to the discovery of BSE in the state of Washington. These new regulations, among other things, govern the removal of SRMs during slaughter, cover the ban on the slaughtering of non-ambulatory

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animals for human food use, set forth the prohibition on the production of mechanically separated meat and ban certain techniques used in the slaughter process. The USDA also issued a notice announcing that FSIS inspectors will not mark ambulatory cattle that have been targeted for BSE surveillance testing as “inspected and passed” until negative test results are obtained. We do not anticipate that these new regulations, individually or in the aggregate, will have a material adverse effect on our business.

While exports of some beef products have commenced once again to Mexico, we cannot anticipate the duration of other continuing beef import bans or whether additional countries may impose similar restrictions. Thus far, the effect of resumed export of beef products to Mexico has been marginal on the United States beef industry. Fed cattle slaughter levels in the United States for the thirteen weeks ended May 29, 2004 fell approximately 5.6% below year-ago levels, reflecting constrained cattle supplies and reduced demand for export products.

The United States Department of Agriculture (USDA) has published a proposed rule revising its policy to keep the U.S. border closed to live animals for processing in the U.S. The comment period for this proposed rule closed on April 7, 2004 and publication of a final rule was anticipated within a reasonable time following closure of the comment period. In the interim, Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (“R-CALF” - a northern states cattle producer’s organization) was successful in obtaining an injunction against the USDA allowing importation of certain beef products produced in Canada pursuant to this rule, because USDA did not follow the “Administrative Procedures Act” prior to issuing its order allowing such action. The injunction has slowed progress toward publication of any final rule, which now is not expected until late July or August at the earliest.

A United States/Japanese Commission was formed to look at the optimal “science based” approach to resolving the issues between the U.S. and Japan. The commission is expected to hold its last meeting in mid-to-late July. Following this meeting, it is anticipated that trade representatives from the United States and Japan will continue their discussions on reopening of the Japanese market to imported beef products from the United States. However, we are not able to predict when or if those discussions will achieve that result.

We cannot presently assess the full economic impact of the consequences of BSE on the U.S. beef industry or on our operations. Our revenues and net income may be materially adversely affected in the event existing import restrictions continue indefinitely, additional countries announce similar restrictions, additional regulatory restrictions are put into effect or domestic consumer demand for beef declines substantially.

On December 21, 2003, a new four year collective bargaining agreement was ratified with the United Food and Commercial Workers and approximately 2,800 employees at the Liberal, Kansas facility.

As described in Note 3 to the Consolidated Financial Statements for the fiscal year ended August 30, 2003 set forth in the Prospectus, effective August 7, 2003, U.S. Premium Beef, Ltd. acquired a controlling interest in Farmland National Beef Packing Company, L.P. (“FNBPC” or “Predecessor”) and formed National Beef Packing Company, LLC (“NBP” or “Successor”) in a transaction accounted for as a purchase (the “Transaction”).

On March 28, 2003, FNBPC acquired National Carriers, Inc. (“National Carriers”), a refrigerated and livestock contract carrier service with terminals in Liberal, Kansas; Dallas, Texas; and Denison, Iowa, for approximately $13.4 million, including the assumption of approximately $8.4 million of indebtedness. The purchase price has been allocated to the assets acquired and liabilities assumed and the operating results of National Carriers are reflected in NBP’s consolidated financial statements subsequent to the date of acquisition.

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Results of Operations

Thirteen weeks ended May 29, 2004 compared to fourteen weeks ended May 31, 2003

General. Net income for the thirteen weeks ended May 29, 2004 was $11.2 million compared to $16.8 million for the fourteen weeks ended May 31, 2003, a decrease of $5.6 million or 33.3%. The thirteen weeks in 2004 contained higher sales compared to the prior year period due to an approximate 8.3% increase in boxed beef and beef product prices, and the inclusion of sales from National Carriers for the full quarter in 2004 compared to partial quarter inclusion in 2003. Tighter cattle supplies and the loss of key export markets due to BSE pressured beef margins, which were somewhat offset by the reduced number of cattle processed due to one less week in the current period.

Total costs and expenses as a percent of sales remained relatively stable at 98.2% for both the thirteen weeks ended May 29, 2004 and the fourteen weeks ended May 31, 2003, while operating income decreased $0.2 million. Interest expense increased by $4.9 million primarily as a result of the Transaction for the thirteen weeks ended May 29, 2004, as compared to the fourteen weeks ended May 31, 2003. Depreciation and amortization expense decreased $0.4 million due to one less week in the thirteen week period ending May 29, 2004, partially offset by increases resulting from the Transaction.

Net Sales. Net sales were $1,018.7 million for the thirteen weeks ended May 29, 2004 compared to $999.1 million for the fourteen weeks ended May 31, 2003, an increase of $19.6 million or 2.0%. The increase resulted primarily from an approximate 8.3% increase in boxed beef and beef product prices despite the loss of key export markets, and the full period inclusion of sales from National Carriers, somewhat offset by an approximate 4.7% reduction in the number of cattle processed due to one less week in the current quarter.

Cost of Sales. Cost of sales was $987.1 million for the thirteen weeks ended May 29, 2004 compared to $967.6 million for the fourteen weeks ended May 31, 2003, an increase of $19.5 million or 2.0%. The increase resulted primarily from an approximate 9.5% increase in average cattle prices over the previous year due to fewer live cattle available for slaughter, offset by one less week in the current period.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $8.6 million for the thirteen weeks ended May 29, 2004 compared to $7.9 million for the fourteen weeks ended May 31, 2003, an increase of $0.7 million or 8.9%. The current year reflects an increase in professional and contract services of $0.9 million and an additional $0.5 million of selling, general and administrative expenses associated with the full period inclusion of National Carriers, partly offset by approximately $0.6 million due to one less week in the current period.

Depreciation and Amortization Expense. Depreciation and amortization expenses were $5.1 million for the thirteen weeks ended May 29, 2004 compared to $5.5 million for the fourteen weeks ended May 31, 2003, a decrease of $0.4 million or 7.3%. The decrease is attributable to one less week of depreciation in the thirteen week period ending May 29, 2004, offset by $0.4 million of incremental amortization resulting from the Transaction.

Operating Income. Operating income was $18.0 million for the thirteen weeks ended May 29, 2004 compared to $18.2 million for the fourteen weeks ended May 31, 2003, a decrease of $0.2 million or 1.1%. The thirteen weeks ended May 29, 2004 as a whole showed slightly improved gross margins over the prior year period, offset by higher selling, general and administrative expenses. This improvement was due to the full period inclusion of National Carriers, Inc. counterbalanced by a decline in the operating income of our beef plants due to difficult market conditions in the beef industry. Operating income, as a percentage of net sales, was 1.8% for both the thirteen weeks ended May 29, 2004 and the fourteen weeks ended May 31, 2003.

Interest Expense. Interest expense was $6.3 million for the thirteen weeks ended May 29, 2004 compared to $1.4 million for the fourteen weeks ended May 31, 2003, an increase of $4.9 million. The increase was due primarily to the higher level of borrowings in the thirteen weeks ended May 29, 2004 as a result of the Transaction, somewhat offset by one less week recorded in the current period.

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Income Tax Expense. Income tax expense of $0.6 million for the thirteen weeks ended May 29, 2004 compared to an income tax benefit that was negligible for the fourteen weeks ended May 31, 2003, an increase of $0.6 million. The increase was primarily due to the acquisition of National Carriers and the associated income tax expense on income from that entity, which is organized as a C Corporation.

Thirty-nine weeks ended May 29, 2004 compared to thirty-nine weeks ended May 31, 2003

General. Net income for the thirty-nine weeks ended May 29, 2004 was $32.0 million compared to $41.5 million for the thirty-nine weeks ended May 31, 2003, a decrease of $9.5 million or 22.9%. The single largest factor in the decrease was the $14.4 million increase in interest expense. Sales and cost of sales were higher, principally due to the higher live cattle prices and higher selling prices of beef products resulting from strong domestic beef demand. Operating income increased $7.1 million or 16.4% over the prior year period, partially due to the full period inclusion of National Carriers. For the period as a whole, in spite of somewhat tighter cattle supplies and the corresponding higher live cattle prices, market demand for beef products continued to be strong enough to offset virtually all of these increases, even with the loss of key export markets for most of the period.

Net sales. Net sales for the thirty-nine weeks ended May 29, 2004 were $3,009.1 million compared to $2,643.1 million for the thirty-nine weeks ended May 31, 2003, an increase of $366.0 million or 13.8%. The majority of this increase was due to an approximate 17.7% increase in selling prices for beef products, partially offset by lower weights on live cattle which translates to fewer pounds of beef products sold in the period, and the full period inclusion of sales from National Carriers.

Cost of sales. Cost of sales for the thirty-nine weeks ended May 29, 2004 were $2,918.5 million compared to $2,566.4 million for the thirty-nine weeks ended May 31, 2003, an increase of $352.1 million or 13.7%. The majority of the increase in cost of sales came as a result of a 19.7% increase in the average price of cattle, partially offset by an approximate 3.5% decrease in average live cattle weights. A portion of the increase was also attributed to the full period additional costs related to National Carriers.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the thirty-nine weeks ended May 29, 2004 were $23.3 million compared to $18.8 million for the thirty-nine weeks ended May 31, 2003, an increase of $4.5 million or 23.9%. Approximately $3.1 million of the increase is attributable to the selling, general and administrative expenses of National Carriers included in the thirty-nine weeks ended May 29, 2004. Additionally, for the current year, professional and contract services increased $0.9 million and payroll and related expenses increased approximately $0.5 million compared to the thirty-nine weeks ended May 31, 2003.

Depreciation and Amortization Expense. Depreciation and amortization expenses for the thirty-nine weeks ended May 29, 2004 were $16.7 million compared to $14.4 million for the thirty-nine weeks ended May 31, 2003, an increase of $2.3 million or 16.0%. The majority of the increase is attributable to the additional depreciation and amortization incurred as a result of the Transaction.

Operating Income. Operating income for the thirty-nine weeks ended May 29, 2004 was $50.5 million compared to $43.4 million for the thirty-nine weeks ended May 31, 2003, an increase of $7.1 million or 16.4%. The increase was due to improved sales values resulting from favorable market conditions and domestic demand for beef products and the full period inclusion of National Carriers for the thirty-nine weeks ended May 29, 2004. Operating income, as a percentage of net sales, was 1.7% for the thirty-nine weeks ended May 29, 2004 and 1.6% for the thirty-nine weeks ended May 31, 2003.

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Interest Expense. Interest expense for the thirty-nine weeks ended May 29, 2004 was $18.5 million compared to $4.1 million for the thirty-nine weeks ended May 31, 2003, an increase of $14.4 million. This increase is due primarily to the increased borrowings and higher average interest rates attributable to the Transaction.

Other, net. Other, net was $2.0 million for the thirty-nine weeks ended May 29, 2004 compared to $2.8 million for the thirty-nine weeks ended May 31, 2003, a decrease of $0.8 million or 28.6%. In 2004, we received $1.2 million through the demutualization of a company which held annuities for NBP employees. In 2003, we received approximately $2.2 million as a result of settlement of a vitamin supplement anti-trust litigation.

Income Tax Expense. Income tax expense was $1.5 million for the thirty-nine weeks ended May 29, 2004 compared to a negligible amount for the thirty-nine weeks ended May 31, 2003, an increase of $1.5 million. The increase was primarily due to the acquisition of National Carriers and the associated income tax expense on income from that entity, which is organized as a C Corporation.

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Segment Results

The Company reports in two business segments: Core Beef and Other. The Company measures segment profit as operating income.

Core Beef—the majority of NBP’s revenues are generated from the sale of fresh meat, which include chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef, and other products. In addition, we also sell beef by-products to the variety meat, feed processing, fertilizer and pet food industries.

Other—the Other segment of NPB consists of the operations of National Carriers, Inc., a refrigerated and livestock contract carrier company and Kansas City Steak Company, LLC, a portion control steak cutting operation.

The following table represents segment results for the periods indicated (in thousands):

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Thirteen weeks ended May 29, 2004 compared to fourteen weeks ended May 31, 2003

Core Beef

Net Sales. Net sales for Core Beef were $1032.6 million for the thirteen weeks ended May 29, 2004 compared to $1,000.5 million for the fourteen weeks ended May 31, 2003, an increase of $32.1 million or 3.2%. The increase resulted primarily from an approximate 8.3% increase in the average net selling price of beef products despite the loss of key export markets due to BSE, somewhat offset by an approximate 4.7% reduction in the number of cattle processed due to one less week in the current period.

Operating income. Operating income for Core Beef was $16.3 million for the thirteen weeks ended May 29, 2004 compared to $18.1 million for the fourteen weeks ended May 31, 2003, a decrease of $1.8 million or 9.9%. The decrease resulted primarily from pressured margins in the beef industry over the previous year and one less week of processing in the thirteen weeks ended May 31, 2003.

Other

Net Sales. Net sales for Other were $41.6 million for the thirteen weeks ended May 29, 2004 compared to $29.1 million for the fourteen weeks ended May 31, 2003, an increase of $12.5 million or 43.0%. The increase was primarily a result of the acquisition of National Carriers in March 2003.

Operating income. Operating income for Other was $1.7 million for the thirteen weeks ended May 29, 2004 compared to $0.1 million for the fourteen weeks ended May 31, 2003, an increase of $1.6 million. The increase was due primarily to the acquisition of National Carriers in March 2003, which contributed an additional $1.5 million in operating income as compared to the same period a year ago.

Thirty-nine weeks ended May 29, 2004 compared to thirty-nine weeks ended May 31, 2003

Core Beef

Net Sales. Net sales for Core Beef were $3,062.6 million for the thirty-nine weeks ended May 29, 2004 compared to $2,642.5 million for the thirty-nine weeks ended May 31, 2003, an increase of $420.1 million or 15.9%. The increase resulted primarily from an approximate 17.7% increase in the average net selling price of beef products, offset by a 1.6% reduction in the number of cattle processed and despite the loss of key export markets due to BSE.

Operating income. Operating income for Core Beef was $45.4 million for the thirty-nine weeks ended May 29, 2004 compared to $42.7 million for the thirty-nine weeks ended May 31, 2003, an increase of $2.7 million or 6.3%. The increase was due primarily to improved demand for beef products partially offset by increased raw material costs. Operating income in the current year was further reduced by higher selling, general and administrative expense and depreciation and amortization expense.

Other

Net Sales. Net sales for Other were $123.4 million for the thirty-nine weeks ended May 29, 2004 compared to $44.6 million for the thirty-nine weeks ended May 31, 2003, an increase of $78.8 million. The increase was primarily a result of the acquisition of National Carriers in March 2003.

Operating income. Operating income for Other was $5.1 million for the thirty-nine weeks ended May 29, 2004 compared to $0.7 million for the thirty-nine weeks ended May 31, 2003, an increase of $4.4 million. The acquisition of National Carriers in March 2003 contributed an additional $3.9 million of operating income in the current year.

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Liquidity and Capital Resources

As of May 29, 2004, we had net working capital of $163.4 million, which included $6.4 million in distributions payable, and cash and cash equivalents of $23.8 million. At August 30, 2003, we had net working capital of $132.6 million, which included $22.4 million in distributions payable, and cash and cash equivalents of $31.3 million. Our primary sources of liquidity are cash flows from operations and available borrowings under our amended credit facility.

As of May 29, 2004, we had $337.2 million of long-term debt, of which $8.7 million was classified as a current liability. As of May 29, 2004, there were outstanding borrowings of $42.6 million, outstanding letters of credit of $33.0 million and available borrowings of $64.4 million under our $140.0 million amended credit facility. Borrowings under our amended credit facility have funded our working capital requirements, capital expenditures and other general corporate purposes.

In addition to outstanding borrowings under our amended credit facility, we had outstanding borrowings under industrial revenue bonds of $13.9 million, senior notes of $160.0 million, term loans of $120.3 million and capital leases and other obligations of $0.4 million as of May 29, 2004.

We believe that available borrowings under our amended credit facility and cash provided by operating activities will be sufficient to support our working capital, capital expenditures and debt service requirements for the foreseeable future. Our ability to generate sufficient cash, however, is subject to certain general economic, financial, industry, legislative, regulatory and other factors beyond our control.

The following is a reconciliation of EBITDA to net income for the specified periods (in thousands):

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Operating Activities

Net cash provided by operating activities in the thirty-nine weeks ended May 29, 2004 increased to $25.2 million compared to $21.5 million in the thirty-nine weeks ended May 31, 2003, primarily the result of a decrease in working capital used, offset by lower net income in the current year period.

Investing Activities

Net cash used in investing activities was $22.6 million in the thirty-nine weeks ended May 29, 2004 compared to $32.9 million in the thirty-nine weeks ended May 31, 2003. This decrease in cash used was primarily attributable to $4.4 million less in expenditures for property, plant and equipment in the current year, and the acquisition of National Carriers in March 2003.

Financing Activities

Net cash used through financing activities was $10.1 million in the thirty-nine weeks ended May 29, 2004 compared to net cash provided through financing activities of $6.0 million in the thirty-nine weeks ended May 31, 2003. The change was attributed to a $14.9 million increase in cash distributions for member taxes and an $8.1 million reduction in the overdraft balance, offset by a $6.9 million increase in revolving credit borrowings.

Bank Covenant Compliance

Our amended senior credit facility contains covenants that limit our ability to incur additional indebtedness, sell or dispose of assets, pay certain dividends and prepay or amend certain indebtedness among other matters. In addition, this facility also contains financial covenants currently requiring us to:

As defined in our amended credit facility, EBITDA contains specified adjustments. On May 29, 2004, we were in compliance with all financial covenant ratios.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The principal market risks affecting our business are exposure to changes in prices for commodities, such as livestock and boxed beef, and interest rate risk.

Commodities. We use various raw materials, many of which are commodities. Raw materials are generally available from several different sources, and we presently believe that we can obtain them as needed. Commodities are subject to price fluctuations that may create price risk. When appropriate, we may hedge commodities in order to mitigate this price risk. While this may tend to limit our ability to participate in gains from commodity price fluctuations, it also tends to reduce the risk of loss from changes in commodity prices. We reflect commodity contract gains and losses as adjustments to the basis of underlying commodities purchased; gains or losses are recognized in the statement of operations as a component of costs of goods sold.

We purchase cattle for use in our processing businesses. When appropriate, we enter into forward purchase contracts at prices determined prior to the delivery of the cattle. The commodity price risk associated with these activities can be hedged by selling (or buying) the underlying commodity, or by using an appropriate commodity derivative instrument. The particular hedging instrument we use depends on a number of factors, including availability of appropriate derivative instruments.

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We sell commodity beef products in our business. Commodity beef products are subject to price fluctuations that may create price risk. When appropriate, we enter into forward sales contracts at prices determined prior to shipment. While this may tend to limit our ability to participate in gains from commodity price fluctuations, it also tends to reduce the risk of loss from changes in commodity beef prices. We reflect commodity contract gains and losses as adjustments to the basis of underlying commodities sold; gains or losses are recognized in the statement of operations as a component of net sales.

We may use futures contracts in order to reduce exposure associated with entering into firm commitments to purchase live cattle at prices determined prior to delivery of the cattle as well as firm commitments to sell certain beef products at sales prices determined prior to shipment. In accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, we account for futures contracts and their related firm commitments, which have not been designated as a normal sale or purchase, at fair value. SFAS No. 133 imposes extensive recordkeeping requirements in order to treat a derivative instrument as a hedge for accounting purposes. Derivatives qualify for treatment as hedges when there is a high correlation between the change in fair value of the instrument and the related change in fair value of the underlying commitment. For derivatives that qualify as effective hedges, the change in fair value has no net effect on earnings until the hedged transaction affects earnings. For derivatives that are not designated as hedging instruments, or for the ineffective portion of a hedging instrument, the change in fair value does affect current period net earnings.

While management believes each of these instruments help mitigate various market risks, they are not designated and accounted for as hedges under SFAS No. 133 as a result of the extensive recordkeeping requirements of this statement. Accordingly, the gains and losses associated with the change in fair value of the instruments and the offsetting gains and losses associated with changes in the market value of the firm commitments are recorded to income and expense in the period of change.

Interest Rates. As a result of our normal borrowing and leasing activities, our operating results are exposed to fluctuations in interest rates, which we manage primarily through our regular financing activities. We generally maintain limited investments in cash and cash equivalents.

We have short-term and long-term debt with variable interest rates. Short-term debt is primarily comprised of the current portion of long-term debt maturing twelve months from the balance sheet date. Short-term debt also includes our revolving credit line used to finance working capital requirements, capital expenditures and general corporate purposes.

Our exposure to these aforementioned market risks has not materially changed since August 30, 2003.

Item 4. Controls and Procedures

We maintain a system of controls and procedures designed to provide reasonable assurance as to the reliability of the financial statements and other disclosures included in this report, as well as to safeguard assets from unauthorized use or disposition. We evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e) under supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in alerting them, in a timely manner, to material information required to be included in our periodic Securities and Exchange Commission filings. There have been no changes in our internal controls over financial reporting during the thirteen weeks ended May 29, 2004 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding legal proceedings, see Note 5, “Contingencies” to our consolidated financial statements included in Part I- Item 1 of this Form 10-Q.

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8-K

During the quarter ended May 29, 2004, the Company furnished a Report on Form 8-K under Item 9, dated April 13, 2004, relating to the conference call to discuss the Company’s second quarter financial performance.

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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.

Date: July 13, 2004

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