U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2003
Commission File No. 0-18200
ARMANINO FOODS OF DISTINCTION, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
COLORADO 84-1041418
- ----------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
incorporation or organization) Number)
30588 San Antonio St., Hayward, CA 94544
-------------------------------------------------
(Address of principal executive office)(Zip Code)
Issuer's telephone number, including area code: (510) 441-9300
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
There were 3,250,108 shares of the Issuer's Common Stock outstanding as of
March 31, 2003.
Transitional Small Business disclosure Format. Yes [ ] No [X]
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
ASSETS
March 31, 2003 December 31, 2002
-------------- -----------------
Current Assets:
Cash and cash equivalents $ 1,446,550 $ 1,094,002
Accounts receivable, net 1,959,994 2,084,160
Inventory 1,629,983 1,888,085
Prepaid expenses 222,520 309,698
Current portion of direct financing
lease receivable 57,568 91,533
Current deferred tax asset 116,033 116,412
----------- -----------
Total Current Assets 5,432,648 5,583,890
Property and Equipment, net 2,077,009 2,162,282
Direct financing lease receivable, net 494,581 475,008
Other Assets:
Deposits 32,000 32,000
Intangible assets, net 470,438 470,438
----------- -----------
Total Other Assets 502,438 502,438
----------- -----------
Total Assets $ 8,506,676 $ 8,723,618
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable & accrued expenses $ 901,231 $ 930,266
Dividends payable 163,859 163,634
----------- -----------
Total Current Liabilities 1,065,090 1,093,900
Deferred tax liability 24,663 33,163
Deferred income on direct financing lease 61,501 63,157
----------- -----------
Total Liabilities 1,151,254 1,190,220
Stockholders' Equity:
Preferred stock; no par value, 10,000,000
shares authorized, no shares issued and
outstanding
Common stock; no par value, 40,000,000
shares authorized, 3,250,108 shares
issued and outstanding at March 31, 2003
and December 31,2002, respectively 7,987,522 7,987,522
Additional paid in capital 37,911 37,911
Retained earnings (658,744) (479,468)
----------- -----------
7,366,689 7,545,965
Less: Deferred compensation expense
in accordance with APB 25 (11,267) (12,567)
Total Stockholders' Equity 7,355,422 7,533,398
----------- -----------
Total Liabilities & Stockholders'
Equity $ 8,506,676 $ 8,723,618
=========== ===========
The accompanying notes are an integral part of these condensed consolidated
financial statements. The balances for December 31, 2002 were taken from the
audited financial statements at that date and condensed.
Page 2
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Statements of Operations
For the Quarter Ended March 31, 2003 and 2002
(Unaudited)
March 31, 2003 March 31, 2002
-------------- --------------
Net Sales $ 3,784,956 $ 3,649,903
Cost of Goods Sold 2,491,641 2,303,726
----------- -----------
Gross Profit 1,293,315 1,346,177
Operating Expenses:
General and administrative 373,930 333,723
Salaries and wages 404,475 408,193
Commissions 139,307 133,391
Advertising, demonstrations and promotions 412,770 369,118
----------- -----------
Total Operating Expenses 1,330,482 1,244,425
Income/(Loss) From Operations (37,167) 101,752
Other Income 13,629 16,313
----------- -----------
Income/(Loss) From Continuing Operations
Before Income Taxes (23,538) 118,065
Current Tax Expense - 43,600
Deferred Tax Expense/(Benefit) (8,121) 7,168
----------- -----------
Net Income/(Loss) $ (15,417) $ 67,297
=========== ===========
Basic Income/(Loss) Per Common Share $ (.00) $ .02
=========== ===========
Weighted Average Common Shares Outstanding 3,250,108 3,187,419
=========== ===========
Diluted Income/(Loss) Per Common Share $ ( .00) $ .02
=========== ===========
Weighted Average Common shares Outstanding 3,263,822 3,480,581
=========== ===========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
Page 3
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2003 and 2002
(Unaudited)
March 31, 2003 March 31, 2002
-------------- --------------
Cash Flows From Operating Activities:
Net income/(loss) $ (15,417) $ 67,297
Adjustment to reconcile net income to net
cash provided by operations:
Depreciation and amortization 126,666 156,074
Provision for deferred taxes (8,121) 7,168
Earned revenue from direct financing lease (1,656) (3,358)
Non-cash expense 1,300 -
Changes in assets and liabilities:
Decrease in accounts receivable 124,166 301,459
(Increase)/Decrease in inventories 258,102 (265,718)
(Increase)/Decrease in prepaid expenses 87,178 (98,289)
Decrease in accounts payable and
accrued expenses (29,035) (220,088)
Decrease in income taxes payable - (40,497)
----------- -----------
Total Adjustments 558,600 (163,249)
Net Cash Provided By/(Used) For
Operating Activities 543,183 (95,952)
Cash Flows From Investing Activities:
Capital expenditures (41,393) (87,187)
Proceeds received from direct financing lease 14,392 29,184
----------- -----------
Net Cash Used For Investing Activities (27,001) (58,003)
----------- -----------
Cash Flows From Financing Activities:
Dividends paid (163,634) (555,181)
Proceeds from exercise of stock options - 181,453
Payments on capital lease obligations - (13,824)
----------- -----------
Net Cash Used For Financing Activities: (163,634) (387,552)
Net Increase/(Decrease) In Cash and Cash
Equivalents 352,548 (541,507)
Cash and Cash Equivalents Beginning of Period 1,094,002 2,496,140
----------- -----------
Cash and Cash Equivalents End of Period $ 1,446,550 $ 1,954,633
=========== ===========
Continued
Page 4
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2003 and 2002
(Unaudited)
March 31, 2003 March 31, 2002
-------------- --------------
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for
Interest $ - $ -
Income tax $ - $ -
Supplemental Disclosures of Non-Cash Items:
For the three months ended March 31, 2003.
During 2002, the Company issued a total of 60,000 options to a director
to purchase common stock at $2.54 per share, which was below the current
market value of the Company common stock of $2.80. The options vest
equally over 36 months. At December 31, 2002, in accordance with APB
25, the Company recorded additional paid in capital of $15,600,
compensation expense of $3,033 and deferred compensation of $12,567 as a
reduction of stockholders equity. For the three months ended March 31,
2003 the Company recognized $1,300 as compensation expense.
The accompanying notes are an integral part of these condensed consolidated
financial statements.
Page 5
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
March 31, 2003
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
of the United States of America for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles of the United States of America
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 December 31,
2002 audited financial statements and notes thereto for Armanino Foods of
Distinction, Inc. The results of operations for the periods ended March 31,
2003 and 2002 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 had $396,030 in
excess of federally insured amounts in its bank accounts at March 31, 2003.
Intangible Assets - 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. During October 2002, the Company purchased proprietary
formulations, trademarks and related equipment of a product line sold under
the Garlic Zing label. In relation to this purchase the Company recorded, as
intangible assets, $95,000 for formulas and trademarks. In 2002, the Company
adopted Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets". The Company has classified its intangible assets as
indefinite-life intangible assets and accordingly has stopped recording
amortization. The Company has no other indefinite-life or definite-life
intangible assets. (See Note 6)
Accounts Receivable - Accounts receivable consist of trade receivables
arising in the normal course of business. At March 31, 2003, the Company has
established an allowance for doubtful accounts of $13,714 which reflects the
Company's best estimate of probable losses inherent in the accounts receivable
balance. The Company determines the allowance based on known troubled
accounts, historical experience, and other currently available evidence.
Amounts written off for the years presented are insignificant for disclosure.
During December 31, 2001, the Company adopted Emerging Issue Task Force
00-25 "Vendor Income Statement Characterization of Consideration Paid to a
Reseller of the Vendor's Products", as amended by Emerging Issue Task Force
01-9 "Accounting for Consideration Given by a Vendor to a Customer (Including
a Reseller of the Vendor's Products)", requiring the Company to reclassify
slotting expenses paid to resellers from Advertising, Demonstrations,
Promotions and Trade Allowances to Net Revenues.
Page 6
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
March 31, 2003
(Unaudited)
Note 1 - Basis of Presentation (continued)
Earnings Per Share - The Company calculates earnings per share in
accordance with Statement of Financial Accounting Standards (SFAS) No. 128
"Earnings Per Share", which requires the Company to present basic and diluted
earnings 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 share 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.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, the disclosures of contingent
assets and liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimated.
Reclassification - The financial statements for periods prior to March
31, 2003 have been reclassified to conform with the headings and
classifications used in the March 31, 2003 financial statements.
The weighted average common shares and common equivalent shares
outstanding for purposes of calculating earnings per share was as follows:
March 31, 2003 March 31, 2002
-------------- --------------
Weighted average common shares outstanding
used in basic earnings per share for the
three months ending 3,250,108 3,187,419
Effect of dilutive stock options 13,714 293,162
Weighted average common shares and potential
dilutive common equivalent shares outstanding
used in dilutive earnings per share 3,263,822 3,480,581
For the three months ended March 31, 2003 the Company had 717,900
additional stock options that could potentially dilute earnings per share in
the future that were not included in the diluted computation.
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
March 31, 2003 and December 31, 2002:
December 31,
March 31, 2003 2002
-------------- --------------
Raw materials & supplies $ 372,925 $ 361,398
Finished goods 1,257,058 1,526,687
---------- ----------
$1,629,983 $1,888,085
========== ==========
Page 7
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
March 31, 2003
(Unaudited)
Note 3 - Related Party Transactions
The Company incurred $7,390 and $1,770 respectively, for the three months
ended March 31, 2003 and 2002, in accounting and consulting fees to Polly,
Scatena, Vasheresse & May (formerly 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.
The Company incurred $0 and $6,000 respectively, for the three months
ended March 31, 2003 and March 31, 2002 in consulting fees to First London
Securities Corporation. A director of the company is a 48% shareholder of DGN
Securities which owns 100% of First London Securities Corporation.
The Company incurred $5,000 and $5,000 respectively, for the three months
ended March 31, 2003 and 2002 in consulting fees to Tino Barzie, a director of
the Company.
Note 4 - Property and Equipment
Property and equipment consists of the following:
December 31,
March 31, 2003 2002
-------------- --------------
Furniture & Office Equipment $ 312,149 $ 307,071
Plant Machinery & Equipment 3,605,840 3,570,581
Leasehold Improvements 1,802,372 1,802,372
----------- -----------
5,720,361 5,680,024
Accumulated Depreciation (3,643,352) (3,517,742)
----------- -----------
$ 2,077,009 $ 2,162,282
=========== ===========
During the three months ended March 31, 2003 and 2002, depreciation
expense amounted to $126,666 and $156,074, respectively.
Note 5 - Stockholders' Equity
Stock Options:
As of March 31, 2003, the Company had 881,100 outstanding stock options
to purchase the Company's stock at prices ranging from $2.15 to $2.86 per
share to current and former employees, directors and former consultants,
expiring in August 2003 through August 2010.
Dividends:
On December 12, 2002, the Company declared a cash dividend of $.05 per
share payable to shareholders of record on December 26, 2002. The cash
dividend, including fees, in the amount of $163,634 was paid on January 21,
2003.
Page 8
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
March 31, 2003
(Unaudited)
Note 5 - Stockholders' Equity (continued)
On March 14, 2003, the Company declared a cash dividend of $.05 per share
payable to shareholders of record on March 26, 2003. The cash dividend,
including fees, in the amount of $163,859 was paid on April 25, 2003.
Note 6 - Intangible Assets
As of March 31, 2003 the Company's intangible assets consisted of the
following:
Indefinite life intangible assets:
Goodwill $ 375,438
Formulas & Trademarks 95,000
---------
Total intangible Assets $ 470,438
---------
On October 14, 2002 the Company purchased proprietary formulations,
trademarks and related equipment of a product line consisting of natural
"vegan" spreads sold under the Garlic Zing label for $100,000. The purchase
price was allocated $94,000 for formulas, $1,000 for trademarks and $5,000 for
equipment. At March 31, 2003, the Company has $95,000 in formulas and
trademarks classified as indefinite-life intangible assets.
Goodwill represents the excess of the cost of purchasing Alborough, Inc.
over the fair market value of the assets on May 20, 1996. At March 31, 2003,
the Company has $375,438 in goodwill classified as an indefinite-life
intangible asset.
During the year ended December 31, 2002, the Company completed its
initial test of the Company's intangible assets for impairment in accordance
with SFAS No. 142. The Company used the quoted market price of it stock to
test its intangible assets for impairment and determined that the Company's
intangible assets were not impaired.
Prior to adopting SFAS No. 142 on January 1, 2002, the Company's goodwill
was being amortized on a straight-line basis over the estimated useful life of
fifteen years, in accordance with Accounting Principles Board Opinion No. 17,
"Intangible Assets".
Note 7 - Subsequent Event
On March 14, 2003, the Company declared a cash dividend of $.05 per share
payable to shareholders of record on March 26, 2003. The cash dividend,
including fees, in the amount of $163,859 was paid on April 25, 2003.
Page 9
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
ITEM II: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
This Quarterly Report on Form 10-QSB contains forward-looking statements
(as such term is defined in the Private Securities Litigation Reform Act of
1995), and information relating to the Company that is based on beliefs of
management of the Company, as well as assumptions made by and information
currently available to management of the Company. When used in this Report,
the words "estimate," "project," "believe," "anticipate," "intend," "expect,"
and similar expressions are intended to identify forward-looking statements.
Such statements reflect the current views of the Company with respect to
future events based on currently available information and are subject to
risks and uncertainties that could cause actual results to differ materially
from those contemplated in such forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company does not undertake any
obligation to release publicly any revisions to these forward looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Quarter Ended March 31, 2003 and Quarter Ended March 31, 2002
Net sales for the quarter ended March 31, 2003 were $3,784,956 compared
to $3,649,903 for the quarter ended March 31, 2002. The overall increase in
sales was the result of higher pesto and meat products sales. The overall
increase was offset slightly by a decrease in pasta products sales. Pesto
products experienced increases primarily in the foodservice area with the
strongest increases in international sales. Meat products increases were
primarily due to increases in the retail area of the Company's business.
The Company continues to focus its efforts on increasing its customer
base through various sales programs and development of new products.
Promotional and marketing programs are used with various distributors and
retail outlets to support existing sales and develop recognition of the
Company's products. Sales samples are utilized to introduce potential
customers to the Company's line of products. The research and development
department assists the sales effort by developing new and innovative uses for
the Company's products as well as formulating products that meet specific
needs of customers.
Cost of goods sold as a percentage of net sales increased from 63.1% for
the quarter ended March 31, 2002 to 65.8% for the quarter ended March 31,
2003. The increase in this percentage was due to a shift in product mix
favoring the lower margin meatball and breaded chicken products.
Operating expenses as a percentage of net sales were 35.2% for the
quarter ended March 31, 2003 compared to 34.1% for the quarter ended March 31,
2002. The increase in the percentage and the total dollar amount of operating
expenses was primarily due to increases in promotional spending. Increases in
general and administrative expenses contributed to an increase in the overall
operating expenses as well. The increase in general and administrative
expenses resulted from higher insurance costs and higher conventions and shows
expense. Insurance costs increased due to a jump in the rates for the
insurance industry. Conventions and shows increased due to increased
participation at various food shows to introduce the Company's products.
Net loss from continuing operations for the quarter ended March 31, 2003
was $15,417 compared to net income of $67,297 for the quarter ended March 31,
2002. The loss for the quarter was due to a change in the product mix
favoring lower margin products, higher promotional spending, an increase in
insurance costs and higher costs in relation to participation in food shows.
Page 10
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
ITEM II: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Quarter Ended March 31, 2003 And Quarter Ended March 31, 2002
Liquidity And Capital Resources
At March 31, 2003, the Company had working capital of $4,367,558 a
decrease of $122,432 from December 31, 2002. The decrease in working capital
is primarily due to the cash dividends paid. Current assets included
$3,406,544 in cash, cash equivalents and accounts receivable. Management
believes that this level of working capital is adequate to meet anticipated
needs for liquidity.
During the three months ended March 31, 2003, cash provided by operating
activities of the Company amounted to $543,183. The primary reason for this
increase is the decrease in accounts receivable and a decrease in inventory
levels.
During the three months ended March 31, 2003, cash used by investing
activities of the Company amounted to $27,001. This was the result of capital
expenditures offset by proceeds from the direct financing lease.
During the three months ended March 31, 2003, cash used by financing
activities of the Company amounted to $163,634. This was due to a dividend
declared in December of 2002 and paid in the first quarter of 2003.
Subsequent to March 31, 2003 the Company paid a dividend in the amount of
$163,859 that was declared during the first quarter of 2003.
In January 2003, the Company ordered new equipment which will complement
and improve existing production operations. An initial deposit of
approximately $24,000 was made with a balance of $104,000 expected to be paid
in the second quarter of 2003 upon successful installation of the equipment.
The Company presently has no other commitments for material capital
expenditures.
Page 11
PART II
OTHER INFORMATION
II. Other Information
Item 1. Legal Proceedings.
None
Item 2. Changes In Securities and Use of Proceeds.
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.
Exhibits:
98.1 Certification of Chief Filed herewith electronically
Executive Officer Pursuant
to 18 U.S.C. Section 1350
98.2 Certification of Chief Filed herewith electronically
Financial Officer Pursuant
to 18 U.S.C. Section 1350
Reports on Form 8-K:
None
Page 12
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.
By:/s/ William J. Armanino
William J. Armanino
Dated: April 30, 2003 President
Chief Executive Officer
By:/s/ Edmond J. Pera
Edmond J. Pera
Secretary
Treasurer
Chief Financial Officer
CERTIFICATIONS
I, William J. Armanino, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Armanino
Foods of Distinction, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
Page 13
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Dated: April 30, 2003
/s/ William J. Armanino
William J. Armanino
Chief Executive Officer
(Principal Executive Officer)
I, Edmond J. Pera, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Armanino
Foods of Distinction, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
Page 14
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Dated: April 30, 2003
/s/ Edmond J. Pera
Edmond J. Pera
Chief Financial Officer
(Principal Financial Officer)
Page 15