<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[x]  Quarterly report pursuant to Section 13 or 15 (d) of the Securities
     Exchange Act of 1934

                 For the quarterly period ended October 7, 2001
                                       or

[_]  Transition report pursuant to Section 13 or 15 (d) of the Securities
     Exchange Act of 1934

                    For the transition period from ___ to ___

                        Commission file number: 333-76569

                                 Luigino's, Inc.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                               <C>                            <C>
            Minnesota                         2038                    59-3015985
(State of other jurisdiction of   (Primary Standard Industrial    (I.R.S. Employer
 incorporation or organization)       Classification Code)       Identification No.)
</TABLE>


                              525 Lake Avenue South
                                Duluth, MN 55802
                                 (218) 723-5555
  (Address, including zip code, and telephone number, including area code, of
                   registrant's principal executive offices.)

Check whether the registrant: (1) 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

               Common                                    1,000
------------------------------------   ----------------------------------------
              (Class)                     (Outstanding at November 19, 2001)
<PAGE>

                          LUIGINO'S, INC AND SUBSIDIARY
                                      INDEX


<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                          PAGE NO.
                                                                                        --------
<S>                                                                                     <C>
Item 1.        Consolidated Financial Statements (Unaudited)

               Consolidated Balance Sheets as of October 7, 2001 (Unaudited)
               and December 31, 2000...................................................       3

               Consolidated Statements of Operations for the third fiscal
               quarter ended and 40 weeks ended October 7, 2001(Unaudited)
               and October 8, 2000 (Unaudited).........................................       4

               Consolidated Statements of Cash Flows for 40 weeks ended October 7,
               2001 (Unaudited) and October 8, 2000 (Unaudited)........................       5

               Notes to Financial Statements (Unaudited)...............................       6

Item 2.        Management's Discussion and Analysis of Financial Condition and
                   Results of Operations...............................................       8

Item 3.        Quantitative and Qualitative Disclosures About Market Risk..............      13


PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders...........................      14

Item 5.  Other Information.............................................................      14

Item 6.  Exhibits and Reports on Form 8-K..............................................      14
</TABLE>

                                       2
<PAGE>

                         LUIGINO'S, INC. AND SUBSIDIARY
                           Consolidated Balance Sheets
                 (In Thousands, Except Share and Per Share Data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                      October 7,          December 31,
                                                                                         2001                 2000
                                                                                     ------------         ------------
<S>                                                                                  <C>                  <C>
ASSETS
Current Assets:
      Cash and cash equivalents.................................................        $   1,241            $     313
      Receivables, net of allowance for doubtful accounts of $145 and $145......           25,172               26,441
      Inventories...............................................................           20,445               19,066
      Prepaid expenses and other................................................            3,026                2,163
                                                                                     ------------         ------------
          Total current assets.................................................            49,884               47,983
                                                                                     ------------         ------------

Property, Plant and Equipment:
      Land......................................................................               22                   22
      Buildings and improvements................................................           16,831               16,818
      Machinery and equipment...................................................          116,161              111,390
      Office equipment and leasehold improvements...............................            5,773                5,566
      Construction in progress..................................................            1,603                1,552
      Less -- Accumulated depreciation..........................................          (54,782)             (45,550)
                                                                                     ------------         ------------
           Net property, plant and equipment....................................           85,608               89,798
                                                                                     ------------         ------------
Other Assets:
      Receivables from stockholders.............................................            5,448                5,891
      Deferred costs, principally debt issuance costs...........................            6,078                4,587
      Restricted cash...........................................................              672                  709
      Goodwill and other intangibles, net of amortization of $5,891.............           70,290                    -
                                                                                     ------------         ------------
           Total other assets...................................................           82,488               11,187
                                                                                     ------------         ------------
Total Assets....................................................................        $ 217,980            $ 148,968
                                                                                     ============         ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
      Current maturities of long-term debt......................................        $  10,429            $   2,450
      Accounts payable..........................................................           18,524               16,461
      Accrued expenses --
           Accrued payroll and benefits.........................................            3,125                4,798
           Accrued interest.....................................................            2,289                4,465
           Accrued promotions and other.........................................           10,055                4,594
                                                                                     ------------         ------------
           Total current liabilities............................................           44,422               32,768

Long-Term Debt, less current maturities.........................................          158,102              116,948
Deferred Taxes..................................................................            9,268                    -
                                                                                     ------------         ------------
           Total liabilities....................................................          211,792              149,716
                                                                                     ------------         ------------
Commitments and Contingencies (Notes 6 and 7)

Stockholders' Equity (Deficit):
      Common stocks --
           Voting, $1 stated par value, 600 shares authorized;
             100 shares issued and outstanding..................................                -                    -
           Nonvoting, $1 stated par value, 900 shares authorized;
             900 shares issued and outstanding..................................                1                    1
      Additional paid-in capital................................................              655                  655
      Retained earnings (deficit)...............................................            5,532               (1,404)
                                                                                     ------------         ------------
           Total stockholders' equity (deficit).................................            6,188                 (748)
                                                                                     ------------         ------------
Total Liabilities and Stockholders' Equity (Deficit)............................        $ 217,980            $ 148,968
                                                                                     ============         ============
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       3
<PAGE>

                         LUIGINO'S, INC. AND SUBSIDIARY
                      Consolidated Statements of Operations
                                 (In Thousands)
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                Third Fiscal Quarter Ended                     40 Weeks Ended
                                          --------------------------------------    --------------------------------------
                                            October 7, 2001     October 8, 2000       October 7, 2001     October 8, 2000
                                          ------------------  ------------------    ------------------  ------------------
<S>                                       <C>                 <C>                   <C>                 <C>
Net Sales...............................   $         80,761    $         62,093      $        264,894    $        199,918
Cost of Goods Sold......................             45,167              36,391               155,371             118,976

                                          ------------------  ------------------    ------------------  ------------------
         Gross profit...................             35,594              25,702               109,523              80,942
                                          ------------------  ------------------    ------------------  ------------------

Operating Expenses:
         Selling and promotional........             17,876              14,892                62,544              50,587
         General and administrative.....              8,202               5,489                27,009              18,089

                                          ------------------  ------------------    ------------------  ------------------
         Total operating expenses.......             26,078              20,381                89,553              68,676
                                          ------------------  ------------------    ------------------  ------------------

         Operating income..............               9,516               5,321                19,970              12,266

Other Income (Expense):
         Interest expense..............              (3,729)             (3,062)              (13,017)            (10,410)
         Interest income...............                  77                  84                   300                 288
         Other, net....................                  (6)                 15                  (317)                143

                                          ------------------  ------------------    ------------------  ------------------
         Total other expense...........              (3,658)             (2,963)              (13,034)             (9,979)
                                          ------------------  ------------------    ------------------  ------------------

Net Income.............................    $          5,858    $          2,358      $          6,936    $          2,287
                                          ==================  ==================    ==================  ==================
</TABLE>

   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                       4
<PAGE>

                         LUIGINO'S, INC. AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
                                 (In Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                             40 Weeks Ended
                                                                              ---------------------------------------------
                                                                                 October 7, 2001         October 8, 2000
                                                                              ---------------------    --------------------
<S>                                                                           <C>                      <C>
Operating Activities:
     Net Income...........................................................     $             6,936      $            2,287
     Adjustments to net income provided by (used in)
     operating activites -
         Depreciation and amortization....................................                  16,076                   9,782
         Deferred income taxes............................................                    (332)                      -
         Changes in operating assets and liabilities:
              Receivables.................................................                   1,269                   1,597
              Inventories.................................................                  (1,379)                  1,849
              Prepaid expenses and other..................................                    (863)                   (399)
              Accounts payable and accrued expenses.......................                   3,675                 (17,245)
                                                                              ---------------------    --------------------
                 Net cash provided by (used in) operating activities......                  25,382                  (2,129)
                                                                              ---------------------    --------------------

Investing Activities:
     Purchases of property, plant and equipment...........................                  (5,042)                 (5,518)
     Purchases of other assets............................................                    (806)                   (829)
     Business acquisition.................................................                 (66,587)                      -
                                                                              ---------------------    --------------------
                 Net cash used in investing activities....................                 (72,435)                 (6,347)
                                                                              ---------------------    --------------------

Financing Activities:
     Borrowings on revolving credit agreement.............................                  68,211                  57,300
     Payments on revolving credit agreement...............................                 (69,200)                (47,300)
     Proceeds from debt...................................................                  60,000                       -
     Repayments of debt...................................................                  (9,879)                 (2,263)
     Decrease (increase) in deferred financing costs......................                  (1,632)                    499
     Decrease in restricted cash..........................................                      37                      38
     Decrease in notes receivable.........................................                     444                     250
                                                                              ---------------------    --------------------
                 Net cash provided by financing activities................                  47,981                   8,524
                                                                              ---------------------    --------------------


Increase in cash and cash equivalents.....................................                     928                      48
Cash and cash equivalents, beginning of period............................                     313                     105
                                                                              ---------------------    --------------------
Cash and cash equivalents, end of period..................................     $             1,241      $              153
                                                                              =====================    ====================

Supplemental Information:
              Interest paid...............................................                  14,574                  11,536
              Taxes paid..................................................     $                 -      $                -
                                                                              =====================    ====================
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                   statements

                                       5
<PAGE>

                         LUIGINO'S, INC. AND SUBSIDIARY

                          Notes to Financial Statements
                             (Dollars in Thousands)
                                   (Unaudited)

1.   Operations:

Luigino's, Inc. and Subsidiary (the "Company"), a Minnesota corporation, markets
food products primarily under the Michelina's and Budget Gourmet name brands.
The Michelina's label is manufactured at production facilities located in
Minnesota and Ohio. The Budget Gourmet label is sourced through a co-pack
agreement with Heinz Frozen Food Company (HFF). The Company's products,
distributed predominately in the North American market, are sold through
independent and chain store retail grocery outlets.

2.   Basis of Presentation:

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of
management, all adjustments consisting solely of normal recurring items
considered necessary for a fair presentation have been included.

Operating results for 40 weeks ended October 7, 2001 are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 30, 2001. Certain amounts in the financial statements for the prior
quarter have been reclassified to conform with the current period's
presentation. Those reclassifications had no effect on stockholders' equity
(deficit) or net income.

For further information, refer to the audited financial statements and footnotes
thereto included in the Company's Form 10-K for the fiscal year ended December
31, 2000, filed on March 26, 2001 with the Securities and Exchange Commission.

3.   Recent Accounting Pronouncements:

Effective January 1, 2001, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities (SFAS No. 133)", as amended. SFAS No. 133 establishes
accounting and reporting standards requiring that every derivative instrument be
recorded in the balance sheet as either an asset or liability measured at its
fair value. SFAS No. 133 requires that changes in the derivatives' fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met. The adoption of SFAS No. 133 did not have a material impact on the
Company's consolidated financial statements.

In April 2001, the FASB Emerging Issues Task Force (EITF) reached final
consensus on Issue 00-14, "Accounting for Certain Sales Incentives", which
addresses the recognition, measurement and income statement classification for
certain sales incentives (e.g. coupons) and Issue 00-25, "Accounting for
Consideration from a Vendor to a Retailer in Connection with the Purchase or
Promotion of Vendor's Products", which addresses the income statement
classification of consideration from a vendor to a retailer. These guidelines
will be effective for the Company beginning in the first quarter of 2002. The
implementation of these guidelines will require the Company to make
reclassifications between selling, general and administrative expenses and
sales, the amounts of which have not yet been determined.

On June 29, 2001, the Financial Accounting Standards Board (FASB) approved for
issuance Statement of Financial Accounting Standards (SFAS) 141, Business
Combinations, and SFAS 142, Goodwill and Intangible Assets. Major provisions of
these Statements are as follows: all business combinations initiated after June
30, 2001 must use the purchase accounting method of accounting; the pooling of
interest method of accounting is prohibited except for transactions initiated
before July 1, 2001; intangible assets acquired in a business combination must
be recorded separately from goodwill if they arise from

                                       6
<PAGE>

contractual or other legal rights or are separable from the acquired entity and
can be sold, transferred, licensed, rented or exchanged, either individually or
as part of a related contract, asset or liability; goodwill and intangible
assets with indefinite lives are not amortized but tested for impairment
annually, except in certain circumstances, and whenever there is an impairment
indicator; all acquired goodwill must be assigned to reporting units for
purposes of impairment testing and segment reporting; effective January 1, 2002,
goodwill will no longer be subject to amortization. Management is currently
assessing the impact these statements will have on the Company's results of
operations.

4.   Fiscal Year:

The Company has elected a 52/53 week fiscal year which ends on the Sunday
closest to December 31. The Company's fiscal year includes a 16-week first
fiscal quarter, 12-week second and third fiscal quarters and a 12 or 13 week
fourth fiscal quarter.

5.   Inventories:

Inventories are stated at the lower of first-in, first-out cost or market and
consisted of the following:

<TABLE>
<CAPTION>
                                           October 7, 2001    December 31, 2000
                                           ---------------    -----------------
<S>                                       <C>                 <C>
     Finished Goods..................      $        9,578      $        7,176
     Raw Materials...................               8,015               8,971
     Packaging Supplies..............               2,852               2,919
                                          ----------------    ----------------
                                           $       20,445      $       19,066
                                          ================    ================
</TABLE>

6.   Acquisition of The All American Gourmet Company:

On February 9, 2001, the Company acquired all of the outstanding capital stock
of The All-American Gourmet Company, a Delaware Corporation (AAG) pursuant to a
Purchase Agreement by and between the Company and HFF, a Delaware Corporation
and the parent of AAG. At the date of closing, the only assets owned by AAG were
intangible assets consisting of trademarks, logos, patent licenses, product
formulas, quality specifications, customer lists, and marketing materials. The
aggregate consideration for the acquisition of AAG was $66.6 million in cash.
The Company also agreed to purchase certain finished goods inventory from the
former parent HFF, over a six-month period following closing. The Company
entered into a two-year co-pack agreement with HFF, whereby the Company has
agreed to purchase a minimum of 8 million and 6 million cases in fiscal years
2001 and 2002, respectively.

The Company's acquisition was accounted for by using the purchase method. The
purchase price was allocated to the acquired assets and assumed liabilities
based on a preliminary determination of the fair values of the assets purchased
and liabilities assumed. The purchase price and related acquisition costs
exceeded the preliminary fair values assigned to tangible assets by
approximately $76,187, which excess may be amortized over periods ranging from
two to twenty years on a straight-line basis.

The following unaudited pro forma condensed results of operations for the
periods ended October 7, 2001 and October 8, 2001 have been prepared as if the
transaction occurred on January 1, 2001 and January 3, 2000, respectively.

<TABLE>
<CAPTION>
                                              Third Fiscal Quarter Ended                              40 Weeks Ended
                                        October 7, 2001          October 8, 2000         October 7, 2001          October 8, 2000
                                    --------------------     --------------------    --------------------     --------------------
<S>                                 <C>                      <C>                     <C>                      <C>
Net Sales..................           $          80,761        $          89,789       $         275,648        $         296,170
Income from Operations.....                       9,516                    6,355                  21,914                   16,207
Net Income.................                       5,858                    2,116                   8,204                    1,747
</TABLE>

The financial information does not purport to represent results which would have
been obtained if the acquisition had been in effect on January 1, 2001 and
January 3, 2000 or any future results which may in fact be realized.

                                       7
<PAGE>

The Company is organized as a Subchapter S corporation. Accordingly, all tax
liabilities are the responsibility of individual shareholders. Deferred tax
assets and liabilities become the responsibility of the Company if and when the
Subchapter S corporation structure is converted to a C-Corporation. The
Company's subsidiary, AAG, is a C-Corporation. As such, AAG will be responsible
for federal, state and foreign taxes. As a part of the acquisition of AAG, the
Company recorded a $9.6 million deferred tax liability and corresponding
increase to goodwill due to financial reporting and tax reporting basis
differences.

7.   Debt:

The Company funded the purchase price of the AAG acquisition through a $100,000
credit facility which replaced its existing revolving credit facility. The
credit facility includes (a) a $60,000 term loan with maturity for each of the
five years subsequent to December 31, 2000 of $7,500, $10,000, $13,250, $13,250
and $16,000, and (b) a $40,000 revolving credit facility expiring on December
31, 2005, subject to certain borrowing base limitations. The initial net
proceeds of the credit facility were used to finance the acquisition of AAG,
refinance the existing bank indebtedness of the Company, and pay related fees
and expenses.

Borrowings under the term loan and revolving credit facility bear interest at
2.25% to 3.25% over the rate offered to major banks in the London Interbank
Eurodollar market ("Eurodollar Rate"), based on a leverage ratio calculated on a
quarterly basis. Advances through October 7, 2001 will bear the interest at the
Eurodollar Rate plus 3.25% (6.78% at October 7, 2001). The Company also pays a
fee of 0.375% to 0.50% on the unused daily balance of the revolver based on a
leverage ratio calculated on a quarterly basis.

The credit facility contains various restrictive covenants, which among other
matters, requires the Company to maintain a minimum fixed charge coverage ratio,
a maximum total leverage ratio, a maximum senior leverage ratio and a minimum
EBITDA, all as defined in the credit agreement. The credit agreement also limits
additional indebtedness, capital expenditures and cash dividends. At October 7,
2001, the Company was in compliance with all covenants in the credit agreement.


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

The following discussion of the financial condition and results of operations of
Luigino's, Inc. and Subsidiary (the "Company" or "Luigino's") should be read in
conjunction with the Company's Consolidated Financial Statements and Notes
thereto.

Results of Operations

On February 9, 2001, the Company acquired all of the outstanding capital stock
of The All American Gourmet Company, ("AAG") pursuant to a Purchase Agreement by
and among the Company and Heinz Frozen Food Company ("HFF"), and the parent
company of AAG. The Company obtained all of AAG's intellectual property rights,
including logos, trademarks, patent licenses, product formulas, quality
specifications, customer lists and marketing materials. The aggregate
consideration for the acquisition of AAG was $66.6 million in cash, of which $10
million was payable as a non-competition fee under a co-pack agreement entered
into on the same date between the Company and HFF. The cash used in the
acquisition came from borrowings under a five-year $100 million senior credit
facility entered into as of the closing date among the Company, Bank One, NA and
U.S. Bank National Association. In addition, the Company agreed to purchase
certain finished goods inventory from HFF for a six-month period following the
closing date and certain finished goods inventory remaining at the conclusion of
the six-month period. The Company also entered into a two-year co-pack agreement
with HFF, whereby the Company has agreed to purchase a minimum of 8 million and
6 million cases in fiscal 2001 and 2002, respectively. As a result of this
acquisition, the Company began to market and distribute the Budget Gourmet
frozen entree product lines.

                                       8
<PAGE>

The following table sets forth, for the periods indicated, the major components
of Luigino's statements of operations expressed as a percentage of net sales:

<TABLE>
<CAPTION>
                                                  Third Fiscal Quarter Ended                          40 Weeks Ended
                                          ----------------------------------------       ---------------------------------------
                                            October 7, 2001        October 8, 2000         October 7, 2001       October 8, 2000
                                          ------------------    ------------------       ------------------   ------------------
<S>                                       <C>                   <C>                      <C>                  <C>
Net Sales............................                  100.0 %               100.0 %                  100.0 %              100.0 %
Cost of Goods Sold...................                   55.9                  58.6                     58.7                 59.5
                                          ------------------    ------------------       ------------------   ------------------

      Gross profit...................                   44.1                  41.4                     41.3                 40.5

Operating Expenses:
      Selling and promotional........                   22.1                  24.0                     23.6                 25.3
      General and administrative.....                   10.2                   8.8                     10.2                  9.1
                                          ------------------    ------------------       ------------------   ------------------

      Total operating expenses.......                   32.3                  32.8                     33.8                 34.4

      Operating income...............                   11.8                   8.6                      7.5                  6.1

Other Income (Expense):
      Interest expense...............                   (4.6)                 (4.9)                    (4.9)                (5.2)
      Interest income................                    0.1                   0.1                      0.1                  0.1
      Other, net.....................                   (0.0)                  0.0                     (0.1)                 0.1
                                          ------------------    ------------------       ------------------   ------------------

           Total other expense.......                   (4.5)                 (4.8)                    (4.9)                (5.0)
                                          ------------------    ------------------       ------------------   ------------------

Net Income (Loss)....................                    7.3 %                 3.8 %                    2.6 %                1.1 %
                                          ==================    ==================       ==================   ==================
</TABLE>


Third Fiscal Quarter 2001 compared to Third Fiscal Quarter 2000

Net Sales.  The following table sets forth the Company's net sales by product
line and the percentage change from the prior period:

<TABLE>
<CAPTION>
                                            Third Fiscal Quarter Ended              Percentage
                                   -------------------------------------------
                                      October 7, 2001         October 8, 2000         Change
                                   -------------------     -------------------     -------------
                                             (Dollars in thousands)
<S>                                <C>                     <C>                     <C>
Popular.........................     $         49,321        $         40,904              20.6 %
Economy.........................               19,721                   7,157             175.5
Signature.......................                3,975                   7,188             (44.7)
Snacks..........................                2,834                   3,593             (21.1)
Kids............................                4,910                   3,251              51.0
                                   -------------------     -------------------     -------------
                                     $         80,761        $         62,093              30.1 %
                                   ===================     ===================     =============
</TABLE>

Total net sales for the third fiscal quarter ended October 7, 2001 increased
$18.7 million or 30.1% to $80.8 million from $62.1 million for the comparable
quarter in 2000. Net sales in the Popular and Economy segments increased $8.4
million and $12.6 million, respectively, due primarily to the acquisition of
AAG. Signature net sales declined $3.2 million, due to decreased distribution.
Snacks net sales also decreased by $0.8 million. The Kids product line continued
to show increases in net sales, up $1.7 million over the comparable quarter in
2000, due to distribution gains.

Canadian net sales contributed 9.0% or $7.3 million of net sales for the third
fiscal quarter of 2001 compared to 9.7% or $6.0 million for the third fiscal
quarter in 2000. Factors contributing to this increase in net sales were: (i)
timing of promotional activity, (ii) introduction of the Kids product line as
well as new items within the Popular and Snack product lines; (iii) and timing
of distribution loading.

                                       9
<PAGE>

Total unit volume increased 27.4% in the third fiscal quarter of 2001 due
primarily to the acquisition of AAG.

Gross Profit.  Gross profit in the third fiscal quarter of 2001 increased $9.9
million to $35.6 million from $25.7 million for the comparable quarter in 2000.
This increase is attributed to the increased sales in the Popular and Economy
product lines as the result of the acquisition of AAG. The gross margin
increased to 44.1% of net sales from 41.4% for the comparable quarter in 2000.
The increase in gross margin is the result of pricing and a favorable product
mix.

Selling and Promotional Expenses.  Selling and promotional expenses for the
third fiscal quarter of 2001 increased $3.0 million or 20.0% from the comparable
quarter in 2000. This increase is the net effect of a $4.8 million increase in
promotional spending, of which $4.7 million is related to the acquisition of
AAG, offset by a $1.3 million reduction in advertising expense and a $0.5
million decline in slotting expense.

General and Administrative Expenses.  General and administrative expenses for
the third fiscal quarter of 2001 increased $2.7 million to $8.2 million as
compared to $5.5 million in the same fiscal quarter last year. The increase was
due to higher amortization of $1.8 million on intangible assets associated with
the acquisition of AAG; $0.4 million of increased spending to support the
integration of the AAG acquisition; and a $0.5 million increase in general
spending.

Operating Income.  Operating income for the third fiscal quarter of 2001
increased 78.8% to $9.5 million from $5.3 million in the comparable fiscal
quarter of 2000. This increase is the result of the $9.9 million increase in
gross profit, less the $3.0 million increase in selling and promotional
expenses, and the $2.7 million increase in general and administrative expenses.
As a percentage of net sales, operating income increased to 11.8% of net sales
in the third fiscal quarter of 2001 as compared to 8.6% in the comparable fiscal
quarter of 2000.

Interest Expense.  Interest expense for the third fiscal quarter 2001 increased
to $3.7 million from $3.0 million in 2000. This increase was the result of
higher senior debt levels due to the acquisition of AAG.

Interest Income.  Interest income was $0.1 million for both the third fiscal
quarter of 2001 and 2000.

Net Income.  For the reasons stated above, net income for the third quarter of
2001 increased $3.5 million to $5.9 million as compared to $2.4 million in the
comparable quarter 2000.

The 40 Weeks Ended October 7, 2001 compared to the 40 weeks ended October 8,
2000

Net Sales.  The following table sets forth the Company's net sales by product
line and the percentage change from prior period.

<TABLE>
<CAPTION>
                                                  40 Weeks Ended                    Percentage
                                   -------------------------------------------
                                     October 7, 2001         October 8, 2000          Change
                                   -------------------     -------------------     -------------
                                             (Dollars in thousands)
<S>                                <C>                     <C>                     <C>
Popular.........................     $        164,956        $        133,088              23.9 %
Economy.........................               59,081                  23,813             148.1
Signature.......................               14,372                  25,660             (44.0)
Snacks..........................                9,709                  11,676             (16.8)
Kids............................               16,776                   5,681             195.3
                                   -------------------     -------------------     -------------
                                     $        264,894        $        199,918              32.5 %
                                   ===================     ===================     =============
</TABLE>

Total net sales for the 40 weeks ended October 7, 2001 increased $65.0 million
or 32.5% to $264.9 million from $199.9 million for the comparable period in
2000. Net sales in the Popular and Economy product lines increased $31.9 million
and $35.3 million, respectively, due primarily to the acquisition of AAG.
Signature and Snacks net sales decreased $11.3 million and $2.0 million
respectively, due to

                                       10
<PAGE>

decreased distribution.  Net sales in the Kids product line increased $11.1
million due to distribution gains on the product line which was launched in the
first quarter of 2000.

Canadian net sales contributed 11.3% or $30.0 million to net sales for the 40
weeks ended October 7, 2001, compared to 12.8% or $25.6 million for the
comparable period in 2000. This increase in net sales is primarily the result of
the continued growth of all product labels and the introduction of the Kids
product line in Canada.

Total unit volume increased 32.1% due primarily to the acquisition of AAG.

Gross Profit.  Gross profit for the 40 weeks ended October 7, 2001 increased
$28.6 million to $109.5 million from $80.9 million for the comparable 40 weeks
in 2000. This increase is attributed to the increased sales in the Popular and
Economy product lines as the result of the acquisition of AAG. The gross margin
was 41.3% for the 40 weeks ended October 7, 2001 as compared to 40.5% for the
same 40 weeks in 2000. This margin improvement is primarily the result of a
price increase implemented in January, 2001.

Selling and Promotional Expenses.  Selling and promotional expenses increased
$12.0 million or 23.6% to $62.5 million in the 40 week period ended October 7,
2001. This increase is the result of the increase in promotional expenses, $16.0
million primarily on products related to the acquisition of AAG, less a $2.7
million reduction in advertising expense, and $1.3 million reduction in slotting
expense.

General and Administrative Expenses.  General and administrative expenses for
the 40 weeks ended October 7, 2001 increased $8.9 million or 49.3% over the
comparable period last year to $27.0 million. Factors contributing to the
increase were: (i) higher amortization of $6.1 million on intangible assets,
primarily associated with the acquisition of AAG; (ii) increased spending of
$1.1 million to support the integration of the AAG acquisition, (iii) and a $1.7
million increase in general spending.

Operating Income.  Operating income for the 40 week period ended October 7,
2001 was $20.0 million, an increase of $7.7 million or 62.8% over the comparable
period last year. This increase was the net result of a $28.6 million increase
in gross profit, less the $12.0 million and $8.9 million increase in selling and
promotional expenses and general and administrative expenses, respectively. As a
percentage of net sales, operating income increased to 7.5% of net sales in the
40 week period ended October 7, 2001, as compared to 6.1% for the comparable
period of 2000.

Interest Expense.  Interest expense for the first 40 weeks of 2001 increased
25.0% or $2.6 million to $13.0 million as compared to $10.4 million for the
first 40 weeks of 2000. The increase was the result of the increase in senior
debt associated with the acquisition of AAG.

Interest income.  Interest income for the 40 weeks ended October 7, 2001 was
$0.3 million as compared to $0.3 million in the same period in 2000.

Other, Net.  Other expenses were $0.3 million for the 40 weeks ended October 7,
2001 as compared to $0.1 million of other income for the 40 weeks ended October
8, 2000.

Net Income.  For the reasons stated above, the net income for the 40 week
period ended October 7, 2001 was $6.9 million as compared to net income of $2.3
million in 2000.

Liquidity and Capital Resources

At October 7, 2001, the Company had $6.0 million outstanding on a $40.0 million
line of senior revolving credit with Bank One, NA. At October 7, 2001, the
Company was in compliance with all covenants in the credit agreement with Bank
One. The cash and cash equivalents balance as of October 7, 2001 was $1.2
million, compared to $0.2 million as of October 8, 2000.

Operating activities provided $25.4 million of cash in the first 40 weeks of
2001 compared to $2.1 million used for operating activities for the first 40
weeks of 2000. This $27.5 million improvement is the result of increased
depreciation and amortization of $6.3 million, and a $16.5 million decrease in
working capital requirements, and a $4.7 million increase in net income for the
first 40 weeks of 2001 compared to the first 40 weeks of 2000.

                                       11
<PAGE>

Investing activities used $72.4 million of cash for the first 40 weeks of 2001
and $6.3 million for the first 40 weeks of 2000. This $66.1 million increase in
investing activities is primarily the result of the acquisition of AAG.

Financing activities provided $48.0 million of cash in the first 40 weeks of
2001 as compared to $8.5 million for the first 40 weeks of 2000. The Company
obtained $66.6 million of cash primarily for the acquisition of AAG through
borrowings under the credit facility. The Company funded the purchase price of
the AAG acquisition through a $100.0 million credit facility which replaced its
existing revolving credit facility. The credit facility includes (a) a $60.0
million term loan with maturity for each of the five years subsequent to
December 31, 2000 of $7.5 million, $10.0 million, $13.25 million, $13.25 million
and $16.0 million, and (b) a $40.0 million revolving credit facility expiring on
December 31, 2005, subject to certain borrowing base limitations.

As a part of the Company's strategic growth plan, the Company incurred
approximately $7.7 million for slotting expenses for the first 40 weeks of 2001.
The Company plans to spend an additional $0.6 million in slotting expenses in
2001 to introduce new products and increase product penetration. The Company
also plans on spending approximately $12.0 million on plant and equipment
purchases in 2001, primarily to increase the production and freezer capacity at
its Jackson, Ohio plant.

The Company anticipates continuing to elect Subchapter S treatment under the
U.S. Internal Revenue Code. Consequently, the Company will continue to make
quarterly distributions to the shareholders based upon their estimated tax
liabilities. The Company's subsidiary, AAG, is a C-Corporation. As such, AAG
will be responsible for all tax liabilities including deferred taxes.

Luigino's ability to make scheduled payments of principal of, or to pay the
interest or premiums, if any, on, or to refinance its indebtedness or to fund
planned capital expenditures will depend on future performance, which, to a
certain extent, is subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond the Company's control.
Of the $168.5 million of total indebtedness on October 7, 2001, $100.0 million
consisted of 10% senior subordinated notes issued pursuant to an Indenture dated
February 4, 1999 between the Company and U.S. Bank Trust National Association as
trustee. Interest on the senior subordinated notes is payable semi-annually in
arrears on February 1 and August 1 of each year. The senior subordinated notes
are due February 1, 2006, but may be redeemed by the Company for a premium after
March 1, 2003. Based upon the current level of operations, the Company believes
that cash flow from operations and available cash, together with available
borrowings under the credit agreement, will be adequate to meet the future
liquidity needs, including payment requirements on the senior subordinated
notes, for at least the next several years. The Company may, however, need to
refinance all or a portion of the principal of the senior subordinated notes on
or before maturity. There can be no assurance that the business will generate
sufficient cash flow from operations, or that future borrowings will be
available under the credit agreement in an amount sufficient to enable the
Company to service indebtedness or to fund other liquidity needs. In addition,
there can be no assurance that the Company will be able to effect any such
refinancing on commercially reasonable terms or at all.

New Accounting Pronouncements

Effective January 1, 2001, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities (SFAS No. 133)", as amended. SFAS No. 133 establishes
accounting and reporting standards requiring that every derivative instrument be
recorded in the balance sheet as either an asset or liability measured at its
fair value. SFAS No. 133 requires that changes in the derivatives' fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met. The adoption of SFAS No. 133 did not have a material impact on the
Company's consolidated financial statements.

In April 2001, the FASB Emerging Issues Task Force (EITF) reached final
consensus on Issue 00-14, "Accounting for Certain Sales Incentives", which
addresses the recognition, measurement and income statement classification for
certain sales incentives (e.g. coupons) and Issue 00-25, "Accounting for
Consideration from a Vendor to a Retailer in Connection with the Purchase or
Promotion of Vendor's Products", which addresses the income statement
classification of consideration from a vendor to a retailer. These guidelines
will be effective for the Company beginning in the first quarter of 2002. The

                                       12
<PAGE>

implementation of these guidelines will require the Company to make
reclassifications between selling, general and administrative expenses and
sales, the amounts of which have not yet been determined.

On June 29, 2001, the Financial Accounting Standards Board (FASB) approved for
issuance Statement of Financial Accounting Standards (SFAS) 141, Business
Combinations, and SFAS 142, Goodwill and Intangible Assets. Major provisions of
these Statements are as follows: all business combinations initiated after June
30, 2001 must use the purchase accounting method of accounting; the pooling of
interest method of accounting is prohibited except for transactions initiated
before July 1, 2001; intangible assets acquired in a business combination must
be recorded separately from goodwill if they arise from contractual or other
legal rights or are separable from the acquired entity and can be sold,
transferred, licensed, rented or exchanged, either individually or as part of a
related contract, asset or liability; goodwill and intangible assets with
indefinite lives are not amortized but tested for impairment annually, except in
certain circumstances, and whenever there is an impairment indicator; all
acquired goodwill must be assigned to reporting units for purposes of impairment
testing and segment reporting; effective January 1, 2002, goodwill will no
longer be subject to amortization. Management is currently assessing the impact
these statements will have on the Company's results of operations.

Cautionary Statement

This Form 10-Q contains forward-looking statements within the meaning of federal
securities laws. These statements include statements regarding intent, belief or
current expectations of the Company and its management. These forward-looking
statements are not guarantees of future performance and involve a number of
risks and uncertainties that may cause the Company's actual results to differ
materially from the results discussed in these statements. The Company's
forward-looking statements are subject to risks, uncertainties and assumptions
including, among other things: general economic and business conditions; the
Company's expectations and estimates concerning future financial performance,
financing plans and the impact of competition; anticipated trends in the
Company's industry; and other risks and uncertainties detailed from time to time
in the Company's filings with the Securities and Exchange Commission, including
Exhibit 99.1 to this Form 10-Q.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

Inflation

The Company believes that the relatively moderate rate of inflation over the
past few years has not had a significant impact on sales or profitability.


Market Risk Considerations

Credit Risk. Financial instruments which potentially subject Luigino's to
significant concentrations of credit risk consist primarily of cash and trade
accounts receivable. The Company maintains cash and cash equivalents and other
financial instruments with various financial institutions. The Company's policy
is to limit exposure to any one institution. When the Company formulates its
investment strategy, it considers periodic evaluations of the relative credit
standing of these financial institutions. The Company's concentrations of credit
risk for trade accounts receivable are limited due to the large number of
entities comprising the customer base. The Company has an exclusive distribution
agreement with J.M. Schneider Corporation in Canada, which accounted for 11.3%
of net sales for the 40 weeks ended October 7, 2001. The Company does not
currently foresee a credit risk with this distributor.

Interest Rate Risk. A portion of the Company's long-term debt obligation incurs
interest at floating rates, based on changes in U.S. Dollar LIBOR and prime rate
interest. Therefore, the Company has an exposure to changes in these interest
rates. At October 7, 2001, the Company had $61.0 million of long-term debt
subject to floating interest rates, with interest ranging from 6.7 to 7.5% with
a weighted average interest rate of 6.8%. A 10% increase in U.S. LIBOR and prime
interest rates would have increased interest expense for the third fiscal
quarter ended October 7, 2001 by $0.1 million.

                                       13
<PAGE>

PART II - OTHER INFORMATION

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

None.

Item 5.   Other Information

In connection with the "safe harbor" provisions of the Private Securities
Litigation and Reform Act of 1995, the Company is hereby filing cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in forward-looking statements of the
Company made by, or on behalf of the Company. See Exhibit 99.1 to this report.

Item 6.   Exhibits and Reports on Form 8-K

(a)       Exhibits

          Number         Description
          ------         -----------

          99.1           Cautionary Statements for Purposes of the "Safe Harbor"
                         Provisions of the Private Securities Litigation Reform
                         Act of 1995

            (b)  Reports on Form 8-K

                    The Company filed a Report on Form 8-K/A on April 23, 2001
                    to add certain financial information relating to the
                    acquisition of The All American Gourmet Company, previously
                    reported on a Form 8-K.

                                       14
<PAGE>

                                   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.



                               LUIGINO'S, INC.

Date: November 19, 2001        By: /s/ Thomas W. Knuesel
                               ----------------------------------------
                               Thomas W. Knuesel
                               Chief Financial Officer (principal financial and
                               accounting officer)

                                       15
<PAGE>

                                  EXHIBIT INDEX


          Number         Description
          ------         -----------

          99.1           Cautionary Statements for Purposes of the "Safe Harbor"
                         Provisions of the Private Securities Litigation Reform
                         Act of 1995

                                       16
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{"company-data": {"conformed-name": "LUIGINOS INC", "cik": "0001083751", "assigned-sic": "2030", "irs-number": "593015985", "state-of-incorporation": "MN", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "333-76569", "film-number": "1795375"}, "business-address": {"street1": "524 LAKE AVENUE SOUTH", "city": "DULUTH", "state": "MN", "zip": "55802", "phone": "2187235555"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[x]  Quarterly report pursuant to Section 13 or 15 (d) of the Securities
     Exchange Act of 1934

                 For the quarterly period ended October 7, 2001
                                       or

[_]  Transition report pursuant to Section 13 or 15 (d) of the Securities
     Exchange Act of 1934

                    For the transition period from ___ to ___

                        Commission file number: 333-76569

                                 Luigino's, Inc.
             (Exact name of registrant as specified in its charter)
Minnesota                         2038                    59-3015985
(State of other jurisdiction of   (Primary Standard Industrial    (I.R.S. Employer
 incorporation or organization)       Classification Code)       Identification No.)
525 Lake Avenue South
                                Duluth, MN 55802
                                 (218) 723-5555
  (Address, including zip code, and telephone number, including area code, of
                   registrant's principal executive offices.)

Check whether the registrant: (1) 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

               Common                                    1,000
------------------------------------   ----------------------------------------
              (Class)                     (Outstanding at November 19, 2001)
LUIGINO'S, INC AND SUBSIDIARY
                                      INDEX
PART I - FINANCIAL INFORMATION                                                          PAGE NO.
                                                                                        --------
Item 1.        Consolidated Financial Statements (Unaudited)

               Consolidated Balance Sheets as of October 7, 2001 (Unaudited)
               and December 31, 2000...................................................       3

               Consolidated Statements of Operations for the third fiscal
               quarter ended and 40 weeks ended October 7, 2001(Unaudited)
               and October 8, 2000 (Unaudited).........................................       4

               Consolidated Statements of Cash Flows for 40 weeks ended October 7,
               2001 (Unaudited) and October 8, 2000 (Unaudited)........................       5

               Notes to Financial Statements (Unaudited)...............................       6

Item 2.        Management's Discussion and Analysis of Financial Condition and
                   Results of Operations...............................................       8

Item 3.        Quantitative and Qualitative Disclosures About Market Risk..............      13

PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders...........................      14

Item 5.  Other Information.............................................................      14

Item 6.  Exhibits and Reports on Form 8-K..............................................      14
2
LUIGINO'S, INC. AND SUBSIDIARY
                           Consolidated Balance Sheets
                 (In Thousands, Except Share and Per Share Data)
                                   (Unaudited)
October 7,          December 31,
                                                                                         2001                 2000
                                                                                     ------------         ------------
ASSETS
Current Assets:
      Cash and cash equivalents.................................................        $   1,241            $     313
      Receivables, net of allowance for doubtful accounts of $145 and $145......           25,172               26,441
      Inventories...............................................................           20,445               19,066
      Prepaid expenses and other................................................            3,026                2,163
                                                                                     ------------         ------------
          Total current assets.................................................            49,884               47,983
                                                                                     ------------         ------------

Property, Plant and Equipment:
      Land......................................................................               22                   22
      Buildings and improvements................................................           16,831               16,818
      Machinery and equipment...................................................          116,161              111,390
      Office equipment and leasehold improvements...............................            5,773                5,566
      Construction in progress..................................................            1,603                1,552
      Less -- Accumulated depreciation..........................................          (54,782)             (45,550)
                                                                                     ------------         ------------
           Net property, plant and equipment....................................           85,608               89,798
                                                                                     ------------         ------------
Other Assets:
      Receivables from stockholders.............................................            5,448                5,891
      Deferred costs, principally debt issuance costs...........................            6,078                4,587
      Restricted cash...........................................................              672                  709
      Goodwill and other intangibles, net of amortization of $5,891.............           70,290                    -
                                                                                     ------------         ------------
           Total other assets...................................................           82,488               11,187
                                                                                     ------------         ------------
Total Assets....................................................................        $ 217,980            $ 148,968
                                                                                     ============         ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
      Current maturities of long-term debt......................................        $  10,429            $   2,450
      Accounts payable..........................................................           18,524               16,461
      Accrued expenses --
           Accrued payroll and benefits.........................................            3,125                4,798
           Accrued interest.....................................................            2,289                4,465
           Accrued promotions and other.........................................           10,055                4,594
                                                                                     ------------         ------------
           Total current liabilities............................................           44,422               32,768

Long-Term Debt, less current maturities.........................................          158,102              116,948
Deferred Taxes..................................................................            9,268                    -
                                                                                     ------------         ------------
           Total liabilities....................................................          211,792              149,716
                                                                                     ------------         ------------
Commitments and Contingencies (Notes 6 and 7)

Stockholders' Equity (Deficit):
      Common stocks --
           Voting, $1 stated par value, 600 shares authorized;
             100 shares issued and outstanding..................................                -                    -
           Nonvoting, $1 stated par value, 900 shares authorized;
             900 shares issued and outstanding..................................                1                    1
      Additional paid-in capital................................................              655                  655
      Retained earnings (deficit)...............................................            5,532               (1,404)
                                                                                     ------------         ------------
           Total stockholders' equity (deficit).................................            6,188                 (748)
                                                                                     ------------         ------------
Total Liabilities and Stockholders' Equity (Deficit)............................        $ 217,980            $ 148,968
                                                                                     ============         ============
The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       3
LUIGINO'S, INC. AND SUBSIDIARY
                      Consolidated Statements of Operations
                                 (In Thousands)
                                   (Unaudited)
Third Fiscal Quarter Ended                     40 Weeks Ended
                                          --------------------------------------    --------------------------------------
                                            October 7, 2001     October 8, 2000       October 7, 2001     October 8, 2000
                                          ------------------  ------------------    ------------------  ------------------
Net Sales...............................   $         80,761    $         62,093      $        264,894    $        199,918
Cost of Goods Sold......................             45,167              36,391               155,371             118,976

                                          ------------------  ------------------    ------------------  ------------------
         Gross profit...................             35,594              25,702               109,523              80,942
                                          ------------------  ------------------    ------------------  ------------------

Operating Expenses:
         Selling and promotional........             17,876              14,892                62,544              50,587
         General and administrative.....              8,202               5,489                27,009              18,089

                                          ------------------  ------------------    ------------------  ------------------
         Total operating expenses.......             26,078              20,381                89,553              68,676
                                          ------------------  ------------------    ------------------  ------------------

         Operating income..............               9,516               5,321                19,970              12,266

Other Income (Expense):
         Interest expense..............              (3,729)             (3,062)              (13,017)            (10,410)
         Interest income...............                  77                  84                   300                 288
         Other, net....................                  (6)                 15                  (317)                143

                                          ------------------  ------------------    ------------------  ------------------
         Total other expense...........              (3,658)             (2,963)              (13,034)             (9,979)
                                          ------------------  ------------------    ------------------  ------------------

Net Income.............................    $          5,858    $          2,358      $          6,936    $          2,287
                                          ==================  ==================    ==================  ==================
The accompanying notes are an integral part of these consolidated financial
                                   statements

                                       4
LUIGINO'S, INC. AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
                                 (In Thousands)
                                   (Unaudited)
40 Weeks Ended
                                                                              ---------------------------------------------
                                                                                 October 7, 2001         October 8, 2000
                                                                              ---------------------    --------------------
Operating Activities:
     Net Income...........................................................     $             6,936      $            2,287
     Adjustments to net income provided by (used in)
     operating activites -
         Depreciation and amortization....................................                  16,076                   9,782
         Deferred income taxes............................................                    (332)                      -
         Changes in operating assets and liabilities:
              Receivables.................................................                   1,269                   1,597
              Inventories.................................................                  (1,379)                  1,849
              Prepaid expenses and other..................................                    (863)                   (399)
              Accounts payable and accrued expenses.......................                   3,675                 (17,245)
                                                                              ---------------------    --------------------
                 Net cash provided by (used in) operating activities......                  25,382                  (2,129)
                                                                              ---------------------    --------------------

Investing Activities:
     Purchases of property, plant and equipment...........................                  (5,042)                 (5,518)
     Purchases of other assets............................................                    (806)                   (829)
     Business acquisition.................................................                 (66,587)                      -
                                                                              ---------------------    --------------------
                 Net cash used in investing activities....................                 (72,435)                 (6,347)
                                                                              ---------------------    --------------------

Financing Activities:
     Borrowings on revolving credit agreement.............................                  68,211                  57,300
     Payments on revolving credit agreement...............................                 (69,200)                (47,300)
     Proceeds from debt...................................................                  60,000                       -
     Repayments of debt...................................................                  (9,879)                 (2,263)
     Decrease (increase) in deferred financing costs......................                  (1,632)                    499
     Decrease in restricted cash..........................................                      37                      38
     Decrease in notes receivable.........................................                     444                     250
                                                                              ---------------------    --------------------
                 Net cash provided by financing activities................                  47,981                   8,524
                                                                              ---------------------    --------------------

Increase in cash and cash equivalents.....................................                     928                      48
Cash and cash equivalents, beginning of period............................                     313                     105
                                                                              ---------------------    --------------------
Cash and cash equivalents, end of period..................................     $             1,241      $              153
                                                                              =====================    ====================

Supplemental Information:
              Interest paid...............................................                  14,574                  11,536
              Taxes paid..................................................     $                 -      $                -
                                                                              =====================    ====================
The accompanying notes are an integral part of these consolidated financial
                                   statements

                                       5
LUIGINO'S, INC. AND SUBSIDIARY

                          Notes to Financial Statements
                             (Dollars in Thousands)
                                   (Unaudited)

1.   Operations:

Luigino's, Inc. and Subsidiary (the "Company"), a Minnesota corporation, markets
food products primarily under the Michelina's and Budget Gourmet name brands.
The Michelina's label is manufactured at production facilities located in
Minnesota and Ohio. The Budget Gourmet label is sourced through a co-pack
agreement with Heinz Frozen Food Company (HFF). The Company's products,
distributed predominately in the North American market, are sold through
independent and chain store retail grocery outlets.

2.   Basis of Presentation:

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of
management, all adjustments consisting solely of normal recurring items
considered necessary for a fair presentation have been included.

Operating results for 40 weeks ended October 7, 2001 are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 30, 2001. Certain amounts in the financial statements for the prior
quarter have been reclassified to conform with the current period's
presentation. Those reclassifications had no effect on stockholders' equity
(deficit) or net income.

For further information, refer to the audited financial statements and footnotes
thereto included in the Company's Form 10-K for the fiscal year ended December
31, 2000, filed on March 26, 2001 with the Securities and Exchange Commission.

3.   Recent Accounting Pronouncements:

Effective January 1, 2001, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities (SFAS No. 133)", as amended. SFAS No. 133 establishes
accounting and reporting standards requiring that every derivative instrument be
recorded in the balance sheet as either an asset or liability measured at its
fair value. SFAS No. 133 requires that changes in the derivatives' fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met. The adoption of SFAS No. 133 did not have a material impact on the
Company's consolidated financial statements.

In April 2001, the FASB Emerging Issues Task Force (EITF) reached final
consensus on Issue 00-14, "Accounting for Certain Sales Incentives", which
addresses the recognition, measurement and income statement classification for
certain sales incentives (e.g. coupons) and Issue 00-25, "Accounting for
Consideration from a Vendor to a Retailer in Connection with the Purchase or
Promotion of Vendor's Products", which addresses the income statement
classification of consideration from a vendor to a retailer. These guidelines
will be effective for the Company beginning in the first quarter of 2002. The
implementation of these guidelines will require the Company to make
reclassifications between selling, general and administrative expenses and
sales, the amounts of which have not yet been determined.

On June 29, 2001, the Financial Accounting Standards Board (FASB) approved for
issuance Statement of Financial Accounting Standards (SFAS) 141, Business
Combinations, and SFAS 142, Goodwill and Intangible Assets. Major provisions of
these Statements are as follows: all business combinations initiated after June
30, 2001 must use the purchase accounting method of accounting; the pooling of
interest method of accounting is prohibited except for transactions initiated
before July 1, 2001; intangible assets acquired in a business combination must
be recorded separately from goodwill if they arise from

                                       6
contractual or other legal rights or are separable from the acquired entity and
can be sold, transferred, licensed, rented or exchanged, either individually or
as part of a related contract, asset or liability; goodwill and intangible
assets with indefinite lives are not amortized but tested for impairment
annually, except in certain circumstances, and whenever there is an impairment
indicator; all acquired goodwill must be assigned to reporting units for
purposes of impairment testing and segment reporting; effective January 1, 2002,
goodwill will no longer be subject to amortization. Management is currently
assessing the impact these statements will have on the Company's results of
operations.

4.   Fiscal Year:

The Company has elected a 52/53 week fiscal year which ends on the Sunday
closest to December 31. The Company's fiscal year includes a 16-week first
fiscal quarter, 12-week second and third fiscal quarters and a 12 or 13 week
fourth fiscal quarter.

5.   Inventories:

Inventories are stated at the lower of first-in, first-out cost or market and
consisted of the following:
October 7, 2001    December 31, 2000
                                           ---------------    -----------------
Finished Goods..................      $        9,578      $        7,176
     Raw Materials...................               8,015               8,971
     Packaging Supplies..............               2,852               2,919
                                          ----------------    ----------------
                                           $       20,445      $       19,066
                                          ================    ================
6.   Acquisition of The All American Gourmet Company:

On February 9, 2001, the Company acquired all of the outstanding capital stock
of The All-American Gourmet Company, a Delaware Corporation (AAG) pursuant to a
Purchase Agreement by and between the Company and HFF, a Delaware Corporation
and the parent of AAG. At the date of closing, the only assets owned by AAG were
intangible assets consisting of trademarks, logos, patent licenses, product
formulas, quality specifications, customer lists, and marketing materials. The
aggregate consideration for the acquisition of AAG was $66.6 million in cash.
The Company also agreed to purchase certain finished goods inventory from the
former parent HFF, over a six-month period following closing. The Company
entered into a two-year co-pack agreement with HFF, whereby the Company has
agreed to purchase a minimum of 8 million and 6 million cases in fiscal years
2001 and 2002, respectively.

The Company's acquisition was accounted for by using the purchase method. The
purchase price was allocated to the acquired assets and assumed liabilities
based on a preliminary determination of the fair values of the assets purchased
and liabilities assumed. The purchase price and related acquisition costs
exceeded the preliminary fair values assigned to tangible assets by
approximately $76,187, which excess may be amortized over periods ranging from
two to twenty years on a straight-line basis.

The following unaudited pro forma condensed results of operations for the
periods ended October 7, 2001 and October 8, 2001 have been prepared as if the
transaction occurred on January 1, 2001 and January 3, 2000, respectively.
Third Fiscal Quarter Ended                              40 Weeks Ended
                                        October 7, 2001          October 8, 2000         October 7, 2001          October 8, 2000
                                    --------------------     --------------------    --------------------     --------------------
Net Sales..................           $          80,761        $          89,789       $         275,648        $         296,170
Income from Operations.....                       9,516                    6,355                  21,914                   16,207
Net Income.................                       5,858                    2,116                   8,204                    1,747
The financial information does not purport to represent results which would have
been obtained if the acquisition had been in effect on January 1, 2001 and
January 3, 2000 or any future results which may in fact be realized.

                                       7
The Company is organized as a Subchapter S corporation. Accordingly, all tax
liabilities are the responsibility of individual shareholders. Deferred tax
assets and liabilities become the responsibility of the Company if and when the
Subchapter S corporation structure is converted to a C-Corporation. The
Company's subsidiary, AAG, is a C-Corporation. As such, AAG will be responsible
for federal, state and foreign taxes. As a part of the acquisition of AAG, the
Company recorded a $9.6 million deferred tax liability and corresponding
increase to goodwill due to financial reporting and tax reporting basis
differences.

7.   Debt:

The Company funded the purchase price of the AAG acquisition through a $100,000
credit facility which replaced its existing revolving credit facility. The
credit facility includes (a) a $60,000 term loan with maturity for each of the
five years subsequent to December 31, 2000 of $7,500, $10,000, $13,250, $13,250
and $16,000, and (b) a $40,000 revolving credit facility expiring on December
31, 2005, subject to certain borrowing base limitations. The initial net
proceeds of the credit facility were used to finance the acquisition of AAG,
refinance the existing bank indebtedness of the Company, and pay related fees
and expenses.

Borrowings under the term loan and revolving credit facility bear interest at
2.25% to 3.25% over the rate offered to major banks in the London Interbank
Eurodollar market ("Eurodollar Rate"), based on a leverage ratio calculated on a
quarterly basis. Advances through October 7, 2001 will bear the interest at the
Eurodollar Rate plus 3.25% (6.78% at October 7, 2001). The Company also pays a
fee of 0.375% to 0.50% on the unused daily balance of the revolver based on a
leverage ratio calculated on a quarterly basis.

The credit facility contains various restrictive covenants, which among other
matters, requires the Company to maintain a minimum fixed charge coverage ratio,
a maximum total leverage ratio, a maximum senior leverage ratio and a minimum
EBITDA, all as defined in the credit agreement. The credit agreement also limits
additional indebtedness, capital expenditures and cash dividends. At October 7,
2001, the Company was in compliance with all covenants in the credit agreement.

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

The following discussion of the financial condition and results of operations of
Luigino's, Inc. and Subsidiary (the "Company" or "Luigino's") should be read in
conjunction with the Company's Consolidated Financial Statements and Notes
thereto.

Results of Operations

On February 9, 2001, the Company acquired all of the outstanding capital stock
of The All American Gourmet Company, ("AAG") pursuant to a Purchase Agreement by
and among the Company and Heinz Frozen Food Company ("HFF"), and the parent
company of AAG. The Company obtained all of AAG's intellectual property rights,
including logos, trademarks, patent licenses, product formulas, quality
specifications, customer lists and marketing materials. The aggregate
consideration for the acquisition of AAG was $66.6 million in cash, of which $10
million was payable as a non-competition fee under a co-pack agreement entered
into on the same date between the Company and HFF. The cash used in the
acquisition came from borrowings under a five-year $100 million senior credit
facility entered into as of the closing date among the Company, Bank One, NA and
U.S. Bank National Association. In addition, the Company agreed to purchase
certain finished goods inventory from HFF for a six-month period following the
closing date and certain finished goods inventory remaining at the conclusion of
the six-month period. The Company also entered into a two-year co-pack agreement
with HFF, whereby the Company has agreed to purchase a minimum of 8 million and
6 million cases in fiscal 2001 and 2002, respectively. As a result of this
acquisition, the Company began to market and distribute the Budget Gourmet
frozen entree product lines.

                                       8
The following table sets forth, for the periods indicated, the major components
of Luigino's statements of operations expressed as a percentage of net sales:
Third Fiscal Quarter Ended                          40 Weeks Ended
                                          ----------------------------------------       ---------------------------------------
                                            October 7, 2001        October 8, 2000         October 7, 2001       October 8, 2000
                                          ------------------    ------------------       ------------------   ------------------
Net Sales............................                  100.0 %               100.0 %                  100.0 %              100.0 %
Cost of Goods Sold...................                   55.9                  58.6                     58.7                 59.5
                                          ------------------    ------------------       ------------------   ------------------

      Gross profit...................                   44.1                  41.4                     41.3                 40.5

Operating Expenses:
      Selling and promotional........                   22.1                  24.0                     23.6                 25.3
      General and administrative.....                   10.2                   8.8                     10.2                  9.1
                                          ------------------    ------------------       ------------------   ------------------

      Total operating expenses.......                   32.3                  32.8                     33.8                 34.4

      Operating income...............                   11.8                   8.6                      7.5                  6.1

Other Income (Expense):
      Interest expense...............                   (4.6)                 (4.9)                    (4.9)                (5.2)
      Interest income................                    0.1                   0.1                      0.1                  0.1
      Other, net.....................                   (0.0)                  0.0                     (0.1)                 0.1
                                          ------------------    ------------------       ------------------   ------------------

           Total other expense.......                   (4.5)                 (4.8)                    (4.9)                (5.0)
                                          ------------------    ------------------       ------------------   ------------------

Net Income (Loss)....................                    7.3 %                 3.8 %                    2.6 %                1.1 %
                                          ==================    ==================       ==================   ==================
Third Fiscal Quarter 2001 compared to Third Fiscal Quarter 2000

Net Sales.  The following table sets forth the Company's net sales by product
line and the percentage change from the prior period:
Third Fiscal Quarter Ended              Percentage
                                   -------------------------------------------
                                      October 7, 2001         October 8, 2000         Change
                                   -------------------     -------------------     -------------
                                             (Dollars in thousands)
Popular.........................     $         49,321        $         40,904              20.6 %
Economy.........................               19,721                   7,157             175.5
Signature.......................                3,975                   7,188             (44.7)
Snacks..........................                2,834                   3,593             (21.1)
Kids............................                4,910                   3,251              51.0
                                   -------------------     -------------------     -------------
                                     $         80,761        $         62,093              30.1 %
                                   ===================     ===================     =============
Total net sales for the third fiscal quarter ended October 7, 2001 increased
$18.7 million or 30.1% to $80.8 million from $62.1 million for the comparable
quarter in 2000. Net sales in the Popular and Economy segments increased $8.4
million and $12.6 million, respectively, due primarily to the acquisition of
AAG. Signature net sales declined $3.2 million, due to decreased distribution.
Snacks net sales also decreased by $0.8 million. The Kids product line continued
to show increases in net sales, up $1.7 million over the comparable quarter in
2000, due to distribution gains.

Canadian net sales contributed 9.0% or $7.3 million of net sales for the third
fiscal quarter of 2001 compared to 9.7% or $6.0 million for the third fiscal
quarter in 2000. Factors contributing to this increase in net sales were: (i)
timing of promotional activity, (ii) introduction of the Kids product line as
well as new items within the Popular and Snack product lines; (iii) and timing
of distribution loading.

                                       9
Total unit volume increased 27.4% in the third fiscal quarter of 2001 due
primarily to the acquisition of AAG.

Gross Profit.  Gross profit in the third fiscal quarter of 2001 increased $9.9
million to $35.6 million from $25.7 million for the comparable quarter in 2000.
This increase is attributed to the increased sales in the Popular and Economy
product lines as the result of the acquisition of AAG. The gross margin
increased to 44.1% of net sales from 41.4% for the comparable quarter in 2000.
The increase in gross margin is the result of pricing and a favorable product
mix.

Selling and Promotional Expenses.  Selling and promotional expenses for the
third fiscal quarter of 2001 increased $3.0 million or 20.0% from the comparable
quarter in 2000. This increase is the net effect of a $4.8 million increase in
promotional spending, of which $4.7 million is related to the acquisition of
AAG, offset by a $1.3 million reduction in advertising expense and a $0.5
million decline in slotting expense.

General and Administrative Expenses.  General and administrative expenses for
the third fiscal quarter of 2001 increased $2.7 million to $8.2 million as
compared to $5.5 million in the same fiscal quarter last year. The increase was
due to higher amortization of $1.8 million on intangible assets associated with
the acquisition of AAG; $0.4 million of increased spending to support the
integration of the AAG acquisition; and a $0.5 million increase in general
spending.

Operating Income.  Operating income for the third fiscal quarter of 2001
increased 78.8% to $9.5 million from $5.3 million in the comparable fiscal
quarter of 2000. This increase is the result of the $9.9 million increase in
gross profit, less the $3.0 million increase in selling and promotional
expenses, and the $2.7 million increase in general and administrative expenses.
As a percentage of net sales, operating income increased to 11.8% of net sales
in the third fiscal quarter of 2001 as compared to 8.6% in the comparable fiscal
quarter of 2000.

Interest Expense.  Interest expense for the third fiscal quarter 2001 increased
to $3.7 million from $3.0 million in 2000. This increase was the result of
higher senior debt levels due to the acquisition of AAG.

Interest Income.  Interest income was $0.1 million for both the third fiscal
quarter of 2001 and 2000.

Net Income.  For the reasons stated above, net income for the third quarter of
2001 increased $3.5 million to $5.9 million as compared to $2.4 million in the
comparable quarter 2000.

The 40 Weeks Ended October 7, 2001 compared to the 40 weeks ended October 8,
2000

Net Sales.  The following table sets forth the Company's net sales by product
line and the percentage change from prior period.
40 Weeks Ended                    Percentage
                                   -------------------------------------------
                                     October 7, 2001         October 8, 2000          Change
                                   -------------------     -------------------     -------------
                                             (Dollars in thousands)
Popular.........................     $        164,956        $        133,088              23.9 %
Economy.........................               59,081                  23,813             148.1
Signature.......................               14,372                  25,660             (44.0)
Snacks..........................                9,709                  11,676             (16.8)
Kids............................               16,776                   5,681             195.3
                                   -------------------     -------------------     -------------
                                     $        264,894        $        199,918              32.5 %
                                   ===================     ===================     =============
Total net sales for the 40 weeks ended October 7, 2001 increased $65.0 million
or 32.5% to $264.9 million from $199.9 million for the comparable period in
2000. Net sales in the Popular and Economy product lines increased $31.9 million
and $35.3 million, respectively, due primarily to the acquisition of AAG.
Signature and Snacks net sales decreased $11.3 million and $2.0 million
respectively, due to

                                       10
decreased distribution.  Net sales in the Kids product line increased $11.1
million due to distribution gains on the product line which was launched in the
first quarter of 2000.

Canadian net sales contributed 11.3% or $30.0 million to net sales for the 40
weeks ended October 7, 2001, compared to 12.8% or $25.6 million for the
comparable period in 2000. This increase in net sales is primarily the result of
the continued growth of all product labels and the introduction of the Kids
product line in Canada.

Total unit volume increased 32.1% due primarily to the acquisition of AAG.

Gross Profit.  Gross profit for the 40 weeks ended October 7, 2001 increased
$28.6 million to $109.5 million from $80.9 million for the comparable 40 weeks
in 2000. This increase is attributed to the increased sales in the Popular and
Economy product lines as the result of the acquisition of AAG. The gross margin
was 41.3% for the 40 weeks ended October 7, 2001 as compared to 40.5% for the
same 40 weeks in 2000. This margin improvement is primarily the result of a
price increase implemented in January, 2001.

Selling and Promotional Expenses.  Selling and promotional expenses increased
$12.0 million or 23.6% to $62.5 million in the 40 week period ended October 7,
2001. This increase is the result of the increase in promotional expenses, $16.0
million primarily on products related to the acquisition of AAG, less a $2.7
million reduction in advertising expense, and $1.3 million reduction in slotting
expense.

General and Administrative Expenses.  General and administrative expenses for
the 40 weeks ended October 7, 2001 increased $8.9 million or 49.3% over the
comparable period last year to $27.0 million. Factors contributing to the
increase were: (i) higher amortization of $6.1 million on intangible assets,
primarily associated with the acquisition of AAG; (ii) increased spending of
$1.1 million to support the integration of the AAG acquisition, (iii) and a $1.7
million increase in general spending.

Operating Income.  Operating income for the 40 week period ended October 7,
2001 was $20.0 million, an increase of $7.7 million or 62.8% over the comparable
period last year. This increase was the net result of a $28.6 million increase
in gross profit, less the $12.0 million and $8.9 million increase in selling and
promotional expenses and general and administrative expenses, respectively. As a
percentage of net sales, operating income increased to 7.5% of net sales in the
40 week period ended October 7, 2001, as compared to 6.1% for the comparable
period of 2000.

Interest Expense.  Interest expense for the first 40 weeks of 2001 increased
25.0% or $2.6 million to $13.0 million as compared to $10.4 million for the
first 40 weeks of 2000. The increase was the result of the increase in senior
debt associated with the acquisition of AAG.

Interest income.  Interest income for the 40 weeks ended October 7, 2001 was
$0.3 million as compared to $0.3 million in the same period in 2000.

Other, Net.  Other expenses were $0.3 million for the 40 weeks ended October 7,
2001 as compared to $0.1 million of other income for the 40 weeks ended October
8, 2000.

Net Income.  For the reasons stated above, the net income for the 40 week
period ended October 7, 2001 was $6.9 million as compared to net income of $2.3
million in 2000.

Liquidity and Capital Resources

At October 7, 2001, the Company had $6.0 million outstanding on a $40.0 million
line of senior revolving credit with Bank One, NA. At October 7, 2001, the
Company was in compliance with all covenants in the credit agreement with Bank
One. The cash and cash equivalents balance as of October 7, 2001 was $1.2
million, compared to $0.2 million as of October 8, 2000.

Operating activities provided $25.4 million of cash in the first 40 weeks of
2001 compared to $2.1 million used for operating activities for the first 40
weeks of 2000. This $27.5 million improvement is the result of increased
depreciation and amortization of $6.3 million, and a $16.5 million decrease in
working capital requirements, and a $4.7 million increase in net income for the
first 40 weeks of 2001 compared to the first 40 weeks of 2000.

                                       11
Investing activities used $72.4 million of cash for the first 40 weeks of 2001
and $6.3 million for the first 40 weeks of 2000. This $66.1 million increase in
investing activities is primarily the result of the acquisition of AAG.

Financing activities provided $48.0 million of cash in the first 40 weeks of
2001 as compared to $8.5 million for the first 40 weeks of 2000. The Company
obtained $66.6 million of cash primarily for the acquisition of AAG through
borrowings under the credit facility. The Company funded the purchase price of
the AAG acquisition through a $100.0 million credit facility which replaced its
existing revolving credit facility. The credit facility includes (a) a $60.0
million term loan with maturity for each of the five years subsequent to
December 31, 2000 of $7.5 million, $10.0 million, $13.25 million, $13.25 million
and $16.0 million, and (b) a $40.0 million revolving credit facility expiring on
December 31, 2005, subject to certain borrowing base limitations.

As a part of the Company's strategic growth plan, the Company incurred
approximately $7.7 million for slotting expenses for the first 40 weeks of 2001.
The Company plans to spend an additional $0.6 million in slotting expenses in
2001 to introduce new products and increase product penetration. The Company
also plans on spending approximately $12.0 million on plant and equipment
purchases in 2001, primarily to increase the production and freezer capacity at
its Jackson, Ohio plant.

The Company anticipates continuing to elect Subchapter S treatment under the
U.S. Internal Revenue Code. Consequently, the Company will continue to make
quarterly distributions to the shareholders based upon their estimated tax
liabilities. The Company's subsidiary, AAG, is a C-Corporation. As such, AAG
will be responsible for all tax liabilities including deferred taxes.

Luigino's ability to make scheduled payments of principal of, or to pay the
interest or premiums, if any, on, or to refinance its indebtedness or to fund
planned capital expenditures will depend on future performance, which, to a
certain extent, is subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond the Company's control.
Of the $168.5 million of total indebtedness on October 7, 2001, $100.0 million
consisted of 10% senior subordinated notes issued pursuant to an Indenture dated
February 4, 1999 between the Company and U.S. Bank Trust National Association as
trustee. Interest on the senior subordinated notes is payable semi-annually in
arrears on February 1 and August 1 of each year. The senior subordinated notes
are due February 1, 2006, but may be redeemed by the Company for a premium after
March 1, 2003. Based upon the current level of operations, the Company believes
that cash flow from operations and available cash, together with available
borrowings under the credit agreement, will be adequate to meet the future
liquidity needs, including payment requirements on the senior subordinated
notes, for at least the next several years. The Company may, however, need to
refinance all or a portion of the principal of the senior subordinated notes on
or before maturity. There can be no assurance that the business will generate
sufficient cash flow from operations, or that future borrowings will be
available under the credit agreement in an amount sufficient to enable the
Company to service indebtedness or to fund other liquidity needs. In addition,
there can be no assurance that the Company will be able to effect any such
refinancing on commercially reasonable terms or at all.

New Accounting Pronouncements

Effective January 1, 2001, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities (SFAS No. 133)", as amended. SFAS No. 133 establishes
accounting and reporting standards requiring that every derivative instrument be
recorded in the balance sheet as either an asset or liability measured at its
fair value. SFAS No. 133 requires that changes in the derivatives' fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met. The adoption of SFAS No. 133 did not have a material impact on the
Company's consolidated financial statements.

In April 2001, the FASB Emerging Issues Task Force (EITF) reached final
consensus on Issue 00-14, "Accounting for Certain Sales Incentives", which
addresses the recognition, measurement and income statement classification for
certain sales incentives (e.g. coupons) and Issue 00-25, "Accounting for
Consideration from a Vendor to a Retailer in Connection with the Purchase or
Promotion of Vendor's Products", which addresses the income statement
classification of consideration from a vendor to a retailer. These guidelines
will be effective for the Company beginning in the first quarter of 2002. The

                                       12
implementation of these guidelines will require the Company to make
reclassifications between selling, general and administrative expenses and
sales, the amounts of which have not yet been determined.

On June 29, 2001, the Financial Accounting Standards Board (FASB) approved for
issuance Statement of Financial Accounting Standards (SFAS) 141, Business
Combinations, and SFAS 142, Goodwill and Intangible Assets. Major provisions of
these Statements are as follows: all business combinations initiated after June
30, 2001 must use the purchase accounting method of accounting; the pooling of
interest method of accounting is prohibited except for transactions initiated
before July 1, 2001; intangible assets acquired in a business combination must
be recorded separately from goodwill if they arise from contractual or other
legal rights or are separable from the acquired entity and can be sold,
transferred, licensed, rented or exchanged, either individually or as part of a
related contract, asset or liability; goodwill and intangible assets with
indefinite lives are not amortized but tested for impairment annually, except in
certain circumstances, and whenever there is an impairment indicator; all
acquired goodwill must be assigned to reporting units for purposes of impairment
testing and segment reporting; effective January 1, 2002, goodwill will no
longer be subject to amortization. Management is currently assessing the impact
these statements will have on the Company's results of operations.

Cautionary Statement

This Form 10-Q contains forward-looking statements within the meaning of federal
securities laws. These statements include statements regarding intent, belief or
current expectations of the Company and its management. These forward-looking
statements are not guarantees of future performance and involve a number of
risks and uncertainties that may cause the Company's actual results to differ
materially from the results discussed in these statements. The Company's
forward-looking statements are subject to risks, uncertainties and assumptions
including, among other things: general economic and business conditions; the
Company's expectations and estimates concerning future financial performance,
financing plans and the impact of competition; anticipated trends in the
Company's industry; and other risks and uncertainties detailed from time to time
in the Company's filings with the Securities and Exchange Commission, including
Exhibit 99.1 to this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Inflation

The Company believes that the relatively moderate rate of inflation over the
past few years has not had a significant impact on sales or profitability.

Market Risk Considerations

Credit Risk. Financial instruments which potentially subject Luigino's to
significant concentrations of credit risk consist primarily of cash and trade
accounts receivable. The Company maintains cash and cash equivalents and other
financial instruments with various financial institutions. The Company's policy
is to limit exposure to any one institution. When the Company formulates its
investment strategy, it considers periodic evaluations of the relative credit
standing of these financial institutions. The Company's concentrations of credit
risk for trade accounts receivable are limited due to the large number of
entities comprising the customer base. The Company has an exclusive distribution
agreement with J.M. Schneider Corporation in Canada, which accounted for 11.3%
of net sales for the 40 weeks ended October 7, 2001. The Company does not
currently foresee a credit risk with this distributor.

Interest Rate Risk. A portion of the Company's long-term debt obligation incurs
interest at floating rates, based on changes in U.S. Dollar LIBOR and prime rate
interest. Therefore, the Company has an exposure to changes in these interest
rates. At October 7, 2001, the Company had $61.0 million of long-term debt
subject to floating interest rates, with interest ranging from 6.7 to 7.5% with
a weighted average interest rate of 6.8%. A 10% increase in U.S. LIBOR and prime
interest rates would have increased interest expense for the third fiscal
quarter ended October 7, 2001 by $0.1 million.

                                       13
PART II - OTHER INFORMATION

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

None.

Item 5.   Other Information

In connection with the "safe harbor" provisions of the Private Securities
Litigation and Reform Act of 1995, the Company is hereby filing cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in forward-looking statements of the
Company made by, or on behalf of the Company. See Exhibit 99.1 to this report.

Item 6.   Exhibits and Reports on Form 8-K

(a)       Exhibits

          Number         Description
          ------         -----------

          99.1           Cautionary Statements for Purposes of the "Safe Harbor"
                         Provisions of the Private Securities Litigation Reform
                         Act of 1995

            (b)  Reports on Form 8-K

                    The Company filed a Report on Form 8-K/A on April 23, 2001
                    to add certain financial information relating to the
                    acquisition of The All American Gourmet Company, previously
                    reported on a Form 8-K.

                                       14
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.

                               LUIGINO'S, INC.

Date: November 19, 2001        By: /s/ Thomas W. Knuesel
                               ----------------------------------------
                               Thomas W. Knuesel
                               Chief Financial Officer (principal financial and
                               accounting officer)

                                       15
EXHIBIT INDEX

          Number         Description
          ------         -----------

          99.1           Cautionary Statements for Purposes of the "Safe Harbor"
                         Provisions of the Private Securities Litigation Reform
                         Act of 1995

                                       16