<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1998
Commission File No. 0-18200
ARMANINO FOODS OF DISTINCTION, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
COLORADO 84-1041418
- --------------------------------- --------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
30588 San Antonio Street, Hayward, CA 94544
--------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (510) 441-9300
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 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 -----
There were 11,112,001 shares of the Registrant's Common Stock outstanding as
of June 30, 1998.
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PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
----------- -----------
Current Assets:
Cash and cash equivalents $ 320,355 $ 181,013
Treasury bills, held to maturity 2,475,517 2,975,403
Accounts receivable 1,256,989 1,720,683
Inventory 1,551,256 1,574,858
Prepaid expenses 234,188 237,673
Current deferred tax asset 594,571 619,000
----------- -----------
Total Current Assets 6,432,876 7,308,630
Property and Equipment, Net 4,919,921 5,070,557
Other Assets:
Deposits 13,000 13,000
Goodwill, net 522,438 543,438
----------- -----------
Total Other Assets 535,438 556,438
----------- -----------
Total Assets $11,888,235 $12,935,625
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 587,727 $ 1,228,607
Current portion of long-term debt 70,969 67,797
Line of credit payable - 287,439
----------- -----------
Total Current Liabilities 658,696 1,583,843
Deferred tax liability 203,000 203,000
Long-term debt 167,216 203,384
----------- -----------
Total Liabilities 1,028,912 1,990,227
Stockholders' Equity:
Common stock 11,008,373 11,136,042
Additional paid in capital 22,311 22,311
Accumulated deficit (171,361) (212,955)
----------- -----------
Total Stockholders' Equity 10,859,323 10,945,398
----------- -----------
Total Liabilities and Stockholders' Equity $11,888,235 $12,935,625
=========== ===========
The accompanying notes are an integral part of these condensed financial
statements. The balances for December 31, 1997 were taken from the audited
financial statements at that date and condensed.
2
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<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Statements of Operations
For the Quarter Ended June 30, 1998 and 1997
(Unaudited)
June 30, June 30,
1998 1997
----------- -----------
Net Sales $ 3,766,082 $ 3,747,112
Cost of Goods Sold 2,629,518 2,527,114
----------- -----------
Gross Profit 1,136,564 1,219,998
Operating Expenses:
General and administrative 412,351 382,893
Salaries and wages 290,634 311,173
Commissions 95,810 70,128
Advertising, demonstrations, promotions,
and slotting allowances 192,476 201,952
----------- -----------
Total Operating Expenses 991,271 966,146
Income From Operations 145,293 253,852
Other Income 43,851 54,674
----------- -----------
Income From Continuing Operations Before
Income Taxes 189,144 308,526
Current Tax Expense 3,300 84,000
Deferred Tax Expense 72,357 38,428
----------- -----------
Net Income $ 113,487 $ 186,098
Basic Earnings Per Common Share $ .01 $ .02
----------- -----------
Weighted Average Common Shares Outstanding 11,230,154 11,501,851
=========== ===========
Diluted Earnings Per Common Share $ .01 $ .02
----------- -----------
Weighted Average Common Shares Outstanding
Assuming Dilution 11,370,013 11,668,360
=========== ===========
The accompanying notes are an integral part of these condensed financial
statements.
3
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<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Statements of Operations
For the Six Months Ended June 30, 1998 and 1997
(Unaudited)
June 30, June 30,
1998 1997
----------- -----------
Net Sales $ 7,489,505 $ 7,086,725
Cost of Goods Sold 5,507,440 4,876,975
----------- -----------
Gross Profit 1,982,065 2,209,750
Operating Expenses:
General and administrative 820,295 745,642
Salaries and wages 559,263 646,684
Commissions 201,298 179,472
Advertising, demonstrations, promotions,
and slotting allowances 410,578 390,200
----------- -----------
Total Operating Expenses 1,991,434 1,961,998
Income (Loss) From Operations (9,369) 247,752
Other Income 78,692 109,867
----------- -----------
Income From Continuing Operations Before
Income Taxes 69,323 357,619
Current Tax Expense 3,300 97,000
Deferred Tax Expense 24,429 46,051
----------- -----------
Net Income $ 41,594 $ 214,568
Basic Earnings Per Common Share $ .00 $ .02
----------- -----------
Weighted Average Common Shares Outstanding 11,283,232 11,543,632
=========== ===========
Diluted Earnings Per Common Share $ .00 $ .02
----------- -----------
Weighted Average Common Shares Outstanding
Assuming Dilution 11,355,336 11,752,519
=========== ===========
The accompanying notes are an integral part of these condensed financial
statements.
4
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<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1998 and 1997
(Unaudited)
June 30, June 30,
1998 1997
----------- -----------
Cash Flows From Operating Activities:
Net income/(loss) $ 41,594 $ 214,568
Adjustment to reconcile net income to net
cash (used for) provided by operations:
Depreciation and amortization 336,324 209,509
Changes in assets and liabilities:
Decrease in accounts receivable 463,694 729,229
Decrease in inventories 23,602 109,534
(Increase)Decrease in prepaid expenses 3,485 (68,825)
Decrease in deferred tax assets 24,429 143,051
(Decrease)in accounts payable and
accrued expenses (640,880) (404,766)
(Decrease) in net liabilities
of discontinued operations - (75,145)
----------- -----------
Total Adjustments 210,654 642,587
----------- -----------
Net Cash Provided By Operating Activities 252,248 857,155
Cash Flows To Investing Activities:
Increase in deposits on future equipment
purchases - (1,493,201)
Capital expenditures (164,688) (51,275)
Reduction in U.S. treasury bills, net 499,886 317,321
----------- -----------
Net Cash provided (Used For) Investing
Activities 335,198 (1,227,155)
----------- -----------
Cash Flows From Financing Activities:
Issuance of common stock - 9,250
Purchase of Treasury stock (127,669) (367,958)
Payments on capital lease obligations (32,996) (12,254)
Proceeds/(Payment) on short term borrowings (287,439) 392,970
Payments on note payable - (32,073)
----------- -----------
Net Cash Provided By (Used For) Financing
Activities (448,104) (10,065)
----------- -----------
Net Increase (Decrease) In Cash and
Cash Equivalents 139,342 (380,065)
Cash and Cash Equivalents Beginning of Period 181,013 742,856
----------- -----------
Cash and Cash Equivalents End of Period $ 320,355 $ 362,791
=========== ===========
The accompanying notes are an integral part of these condensed financial
statements.
5
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<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1998
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments, consisting of normal recurring accruals, considered necessary
for a fair presentation have been included. It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the December 31, 1997
audited financial statements for Armanino Foods of Distinction, Inc. The
results of operations for the periods ended June 30, 1998 and 1997 are not
necessarily indicative of the operating results for the full year.
The condensed consolidated financial statements include the accounts of
Armanino Foods of Distinction, Inc. ("Parent") and it's wholly-owned dormant
subsidiary AFDI, Inc.
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments (Treasury Bills) purchased with a maturity of
three months or less to be cash equivalents.
The Company acquired a subsidiary (Alborough, Inc.) during May, 1996.
The Company recorded goodwill in the amount of $609,938 as part of the
purchase. The Company is amortizing the goodwill over 15 years, on a straight
line basis.
Earnings Per Share - In February 1997, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards (SFAS) No. 128
"Earnings Per Share," which requires the Company to present basic and diluted
earnings per share, instead of the primary and fully diluted earning per
share. The computation of basic earnings per share is based on the weighted
average number of shares outstanding during the periods presented. The
computation of diluted earnings per shares is based on the weighted average
number of outstanding common shares during the year plus, when their effect is
dilutive, additional shares assuming the exercise of certain vested and
non-vested stock options and warrants, reduced by the number of shares which
could be purchased from the proceeds. Prior period earnings per share and
weighted average shares have been restated to reflect the adoption of SFAS No.
128.
6
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PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1998
(Unaudited)
Note 1 - Continued
The weighted average common shares and common equivalent shares
outstanding for purposes of calculating earnings (loss) per share was as
follows:
June 30, June 30,
1998 1997
---------- ----------
Weighted average common shares outstanding
used in basic earnings per share for the
six months ending 11,238,232 11,543,632
Effect of dilutive stock options 117,104 208,887
---------- ----------
Weighted average common shares and potential
dilutive common equivalent shares outstanding
used in dilutive earning per share 11,355,336 11,752,519
========== ==========
For the six months ended June 30, 1998 the Company had 87,150 stock
options that could potentially dilute earnings per share in the future that
were not included in the diluted computation because to do so would have been
antidilutive for the periods presented.
The June 30, 1998 financial statements reflect that the shareholders
approved a 1 for 300 reverse stock split and a 300 for 1 forward stock split,
wherein in lieu of issuing the fractional share that resulted from the reverse
split to the shareholders of record of less than 300 shares, immediately prior
to the reverse split, the Company is making a cash payment of $.95 per share,
the average daily closing price for the ten days prior to the June 16, 1998
effective date. (See Note 8)
Note 2 - Inventory
Inventory is carried at the lower of cost or market with cost being
determined on the first-in, first-out method and consisted of the following at
June 30, 1998 and December 31, 1997:
June 30, December 31,
1998 1997
---------- ------------
Raw materials & supplies $ 566,641 $ 666,007
Finished goods 984,615 908,851
---------- ----------
$1,551,256 $1,574,858
========== ==========
7
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PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1998
(Unaudited)
Note 3 - Related Party Transactions
The Company incurred $9,135 and $13,958 respectively, for the six months
ended June 30, 1998 and 1997, in accounting and consulting fees to Polly,
Scatena, Gekakis & Co., an accounting firm, the managing partner of which is
also a stockholder and director of the Company. Services provided by the
accounting firm are an extension of the internal accounting functions of the
Company, as well as management, business and systems consulting.
Note 4 - Incentive Compensation
The Company has accrued $0 and $82,128 for the six months ended June 30,
1998 and June 30, 1997 respectively, for its management and employee incentive
compensation plans. These amounts are based on achieving a predetermined
level of sales, net income and personal goals and objectives. Accrued amounts
are eligible for distribution only when the (1) predetermined level of sales
and net income and (2) personal goals and objectives are achieved.
Note 5 - Property and Equipment
Property and equipment consists of the following:
June 30, December 31,
1998 1997
---------- ------------
Furniture & Office Equipment $ 277,667 $ 263,913
Plant Machinery & Equipment 4,603,243 4,469,322
Leasehold Improvements 1,890,394 1,873,381
---------- ----------
6,771,304 6,606,616
Accumulated Depreciation 1,851,383 1,536,059
---------- ----------
$4,919,921 $5,070,557
========== ==========
The Company's property, plant and equipment is pledged as collateral on
a business line of credit.
Note 6 - Line of Credit
As of June 30, 1998 and December 31, 1997, the Company had $0 and
$287,439 respectively outstanding on a $500,000 business line of credit. The
line of credit accrues interest at prime plus .75%. The line of credit
matures in September 1998, and is secured by the Company's accounts
receivable, inventory and equipment.
8
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<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1998
(Unaudited)
Note 7 - Income Taxes
The Company accounts for income taxes in accordance with FASB Statement
109, "Accounting for Income Taxes."
As of June 30, 1998 and December 31, 1997 the net deferred tax assets and
liabilities consisted of the following:
June 30, December 31,
1998 1997
---------- ------------
Current deferred tax asset $ 594,571 $ 619,000
Deferred Tax Liability (203,000) (203,000)
Management estimates that the Company will generate adequate net profits
to offset net operating loss carryforwards prior to the expiration of the net
operating loss carryforwards. Consequently, a deferred tax asset valuation
allowance has not been accrued.
Note 8 - Stockholders' Equity
As of June 30, 1998, the Company had 1,929,750 outstanding stock options
to purchase the Company's stock at prices ranging from $.925 to $1.14 per
share to employees, directors and a consultant, expiring on January 28, 2000
through March 25, 2008. During the six months ended June 30, 1998, the
Company canceled 919,996 previously issued stock options, held by employees,
directors and a consultant and granted 1,447,350 stock options to purchase
common shares at $1.015 to $1.14 per share expiring on January 28, 2000 though
March 25, 2008. Also during the six months ended June 30, 1998, 330,099
previously issued stock options were forfeited or expired.
During the six months ended June 30, 1997, the Company received $9,250,
from issuance of 10,000 shares at $.925 in connection with options exercised,
under the 1993 Stock Option Plan.
In June 1998, the Company accrued $127,669 for payments to be made to the
holders of 134,388 shares of the Company's common stock which were cancelled
in conjunction with the 1 for 300 reverse and 300 for 1 forward stock splits,
which were approved at the May 1998 shareholder meeting. The purpose of the
stock splits was to reduce cost of administering shareholder accounts and
decreasing the amount of time spent by the Company's management responding to
shareholder requests. The stock splits decrease the cost by eliminating
shareholders of record with less than 300 shares, who accounted for less than
1% of the outstanding stock, but accounted for approximately 85% of the total
number of shareholders prior to the reverse and forward stock splits.
9
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PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1998
(Unaudited)
Note 9 - Acquisition of Subsidiary
On May 20, 1996, the Company acquired all of the outstanding common stock
of Alborough, Inc., (dba Emilia Romagna), in a business combination accounted
for as a purchase. Alborough, Inc. was primarily engaged in the manufacturing
of gourmet Italian foods. The results of operations of Alborough, Inc. is
included in the accompanying financial statements since the date of
acquisition. The total cost of the acquisition was $738,779, which exceeded
the fair market value of the net assets of Alborough, Inc. by $609,938. The
excess is recorded as goodwill and is being amortized over 15 years. The
purchase price could increase significantly depending upon the gross margin
attributable to sales made to certain specified customers over the 3-year
period subsequent to the consummation of the purchase agreement. The
agreement between the parties provides that additional payments may be earned
by Alborough, Inc.'s former shareholders based on a percentage of gross margin
attributable to sales made to specified customers. The sales must be made
during a specified period of time and subject to certain minimum sales levels
being achieved. As of June 30, 1998, no additional payments have been made to
Alborough Inc.'s former shareholders as minimum sales to the specified
customers had not been achieved. The Company does not anticipate that any
additional payments will need to be made.
10
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PART I - FINANCIAL INFORMATION
ITEM II: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Quarter and Six Months Ended June 30, 1998 v. Quarter and Six Months Ended
June 30, 1997
Net sales for the quarter ended June 30, 1998 were $3,766,082, as
compared to $3,747,112 for the quarter ended June 30, 1997. For the six
months ended June 30, 1998, net sales were $7,489,505 as compared to
$7,086,725 for the six months ended June 30, 1997. The increase is primarily
attributable to strong increases in the pesto product line sales and initial
sales of sauced entrees to a co-pack customer. These increases were offset by
lower sales of the Company's meatball product line to a club store customer.
The increases experienced in the sales of the pesto product line were the
result of the Company's focus on expansion of the customer base for this
product line. Sales of the entree product line included sales primarily to
one co-pack customer. During the second quarter of 1998, the Company started
developing additional entree products to support the sales effort in this
area. As of June 30, 1998, the Company has not yet obtained any significant
sales of the entree products other than sales to its co-pack customer. As of
May 31, 1998, the Company ceased production and sales of the co-pack
customer's products. No further production for this customer is anticipated.
During the five months ended May 31, 1998, sales to this customer amounted to
approximately $800,000. The Company expects that profitability will not be
negatively impacted due to the reduction in sales to this customer.
Cost of goods sold as a percentage of net sales increased from 67.4% for
the quarter ended June 30, 1997 to 69.8% for the quarter ended June 30, 1998.
Cost of goods sold as a percentage of net sales increased from 68.8% for the
six months ended June 30, 1997 to 73.5% for the six months ended June 30,
1998. The increase for both the quarter and six months ended June 30, 1998
was primarily due to costs associated with the entree product line. Although
showing continuing improvement, the Company experienced higher than expected
costs in the production of these products for a co-pack customer. The
combination of higher production costs and lower than expected sales of the
entree products, other than the co-pack customer, contributed to the higher
cost of goods sold percentage for the quarter and six months ended.
Operating expenses as a percentage of net sales were approximately 26.3%
for the quarter ended June 30, 1998 as compared to 25.7% for the quarter ended
June 30, 1997. Operating expenses for the first six months of 1998 were 26.6%
as compared to 27.7% for the first six months of 1997. The small increase
during the quarter was primarily due to relatively flat sales. The decrease
for the six months was primarily due to higher sales for the six months
period. In absolute dollars, general and administrative expenses increased for
the first quarter and six months of 1998 vs. 1997 primarily due to an increase
in consulting fees and art and label design expense. The lower salaries
expense was due to the allocation of some of the previous general and
administrative employees to the Company's plant operations and therefore this
expense is now included in cost of goods sold. Additionally, the departure of
an employee, during the first quarter of 1997, involved with the operations of
Alborough, Inc. (previously a wholly owned subsidiary) reduced this expense.
11
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<PAGE>
PART I - FINANCIAL INFORMATION
ITEM II: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net income from continuing operations was $113,487 for the quarter ended
June 30, 1998 compared to $186,098 for the quarter ended June 30, 1997. Net
income from continuing operations was $41,594 for the six months ended June
30, 1998 compared to $214,568 for the six months ended June 30, 1997. The
decrease in net income for the quarter and six months was due to higher cost
involved in the manufacture of the entree product line. This had the biggest
impact during the first quarter of 1998.
Quarter and Six Months Ended June 30, 1998 v. Quarter and Six Months Ended
June 30, 1997
Liquidity and Capital Resources
At June 30, 1998, the Company had working capital of $5,774,180, an
increase of $49,393 from December 31, 1997. Current assets included
$4,052,861 in cash and cash equivalents, U.S. treasury bills, and accounts
receivable. Management believes that this level of working capital is
adequate to meet anticipated needs for liquidity.
During the six months ended June 30, 1998, cash provided by operating
activities of the Company amounted to $252,248.
On September 10, 1997, the Company renewed its $500,000 business loan
line of credit with Wells Fargo Bank, in San Francisco, California. This loan
provides for interest at prime plus .75% with a maturity date of September 10,
1998. At June 30, 1998 the Company had $0 outstanding under this line. The
purpose of obtaining this line of credit is to afford the Company greater cash
liquidity and management of its cash investments.
The Company had made deposits on manufacturing equipment and leasehold
improvements in the amount of $1,600,000 as of June 30, 1997. The equipment
and leasehold improvements were placed in service during the third quarter of
1997 at the Hayward, California facility.
On May 20, 1996, the Company purchased all of the outstanding stock of
Alborough, Inc. (dba Emilia Romagna). The total cost of the acquisition was
$738,779 including professional fees paid in relation to the acquisition.
Additionally, the terms of the agreement include an "earn-out" formula which
provides for payments to Alborough shareholders over a three-year period based
on certain performance criteria established. The purchase price could
increase significantly depending upon Alborough, Inc. meeting certain earnings
performance criteria over the 3-year period subsequent to the consummation of
the purchase agreement. The agreement between the parties provides that
additional payments may be earned by Alborough, Inc. shareholders based on a
percentage of gross margin attributable to sales made to specified customers.
The sales must be made during a specified period of time and subject to
certain minimum sales levels being achieved. As of June 30, 1998, the Company
has not incurred any additional cost due to this provision.
The Company presently has no material commitments for capital
expenditures.
12
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<PAGE>
Year 2000 Compliance
Management has addressed the concerns of potential year 2000 computing
problems, both internally and with external parties, and believes that
significant additional costs will not be incurred because of this
circumstance.
PART II
OTHER INFORMATION
II. Other Information
Item 1. Legal Proceedings.
None
Item 2. Changes In Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission Of Matters To A Vote Of Security Holders.
On May 21, 1998, the Company held an Annual Meeting of
Shareholders at which William J. Armanino, Deborah Armanino-LeBlanc, John J.
Micek, III, David Scatena, Robert M. Geller, Tino Barzie, Henry W. Poett, III,
and Soren Svenningsen were each reelected to the Board of Directors. In
addition, the Company' shareholders ratified the appointment of Pritchett,
Siler & Hardy, P.C. as the Company's auditors and approved a proposed
1-for-300 reverse stock split followed by a 300-for-1 forward stock split.
The following sets forth the votes cast for, against or withheld, as well as
the number of abstentions and broker non-votes, as to each of the matters
presented at the meeting:
ELECTION OF DIRECTORS
Nominees For Withheld
William J. Armanino 9,203,596 Shares 81,119 Shares
Deborah Armanino-LeBlanc 9,204,863 Shares 79,852 Shares
John J. Micek, III 8,973,896 Shares 310,819 Shares
David Scatena 9,185,818 Shares 98,897 Shares
Robert M. Geller 9,185,683 Shares 99,032 Shares
Tino Barzie 9,158,457 Shares 126,258 Shares
Henry W. Poett, III 9,185,818 Shares 98,897 Shares
Soren Svenningsen 9,185,318 Shares 99,397 Shares
APPOINTMENT OF PRITCHETT, SILER & HARDY, P.C.
For Against Abstentions
9,316,621 Shares 37,943 Shares 56,409 Shares
PROPOSED REVERSE AND FORWARD STOCK SPLIT
For Against Abstentions Broker Non-Votes
8,967,214 Shares 132,229 Shares 68,926 Shares 116,346 Shares
Item 5. Other Information
None
13
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<PAGE>
Item 6. Exhibits And Reports On Form 8-K
A. Exhibit
27 - Financial Data Schedule Filed herewith
electronically
B. Reports on Form 8-K - None
14
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf of the
undersigned thereunto duly authorized.
ARMANINO FOODS OF DISTINCTION, INC.
Date: August 11, 1998 By: /s/ William J. Armanino
William J. Armanino, President
Chief Executive Officer
Chief Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheets and statements of operations found on page 2 and 4 of the
Company's Form 10-Q for the year to date, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1998
<CASH> 320,355
<SECURITIES> 2,475,517
<RECEIVABLES> 1,256,989
<ALLOWANCES> 0
<INVENTORY> 1,551,256
<CURRENT-ASSETS> 6,432,876
<PP&E> 4,919,921
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,888,235
<CURRENT-LIABILITIES> 658,696
<BONDS> 0
<COMMON> 11,008,373
0
0
<OTHER-SE> (149,050)
<TOTAL-LIABILITY-AND-EQUITY> 11,888,235
<SALES> 7,489,505
<TOTAL-REVENUES> 7,489,505
<CGS> 5,507,440
<TOTAL-COSTS> 5,507,440
<OTHER-EXPENSES> 1,991,434
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 69,323
<INCOME-TAX> 27,729
<INCOME-CONTINUING> 41,594
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,594
<EPS-PRIMARY> (.00)
<EPS-DILUTED> (.00)
</TABLE>
