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May 20, 2002

USA: Cuisine Solutions sees US$1.8m loss in Q3

Alexandria, Va-based Cuisine Solutions has announced a net loss of US$1.78m for its Q3 2002. The significant loss was due to the decline in US sales, said the company, which impacted distribution costs, and the ability to cover fixed production overhead costs due to the reduction in production. The company lowered costs by the reduction of personnel in Alexandria as well as to salary cuts but these cost reductions could not cover overhead cost due to the decreased sales volume during the Q3 2002. In addition to the decrease in sales demand, the company recorded an additional recognition of US$385,000 of losses in equity from the investment in Brazil as well as an amortisation of US$40,000 for web site development cost after the launch of the FIVELEAF brand in February 2002.

Alexandria, Va-based Cuisine Solutions has announced a net loss of US$1.78m for its Q3 2002.

The significant loss was due to the decline in US sales, said the company, which impacted distribution costs, and the ability to cover fixed production overhead costs due to the reduction in production. The company lowered costs by the reduction of personnel in Alexandria as well as to salary cuts but these cost reductions could not cover overhead cost due to the decreased sales volume during the Q3 2002. In addition to the decrease in sales demand, the company recorded an additional recognition of US$385,000 of losses in equity from the investment in Brazil as well as an amortisation of US$40,000 for web site development cost after the launch of the FIVELEAF brand in February 2002.

Revenue in the Q3 2002 decreased from US$9.3m to US$7.65m, a 17.7% decrease compared to the previous year due to a sales decline in the core sales channels On Board Services and Foodservice.

Q3 2002 revenues by country, for Cuisine Solutions subsidiaries, were as follows:

                         Q3 2002      Q3 2001        $Change     %Change

    USA                $ 4,778,000    $ 6,141,000    $ (1,363,000)   (22.2%)
    Norway                 290,000         12,000         278,000  2,316.7%
    France               2,586,000      3,152,000        (566,000)   (18.0%)
    Total Product
     Sales Revenue     $ 7,654,000    $ 9,305,000    $ (1,651,000)   (17.7%)

The sales decline was driven by reduced travel and related reduced demand from airlines, hotels, banquets and casinos. The months following 11 September 2001 resulted in extremely limited business travel, a major source of Cuisine Solutions sales revenue via sales to airlines and the hotel banquet industries.

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